A home renovation done well, is a fantastic way to create some serious wealth. That said, securing a fixer-upper is different buying a property to live in immediately. So, if you intend embracing your inner-Scott Cam, there are few issues to consider before embarking on a renovation strategy.
As a buyer-renovator, you need to have a budget that covers off the cost of the property itself and funds for renovations. If you don’t do your numbers and only have a vague renovation budget in mind, you might find yourself in over your head financially once you start the renovation rescue.
A good starting point when it comes to choosing a property to renovate typically involves finding the worst house on the best street in a popular locale. Revamping an ordinary property on a pleasant road is usually a better strategy than picking a smart home on less popular street and overcapitalising beyond the neighbourhood’s prevailing standards. Avoiding overcapitalising is crucial if you plan a quick sale for profit once the renovation is completed.
When choosing a house to renovate, establish whether the makeover will require structural or cosmetic building work. Most renovation rescuers will tell you it’s typically best to steer clear of properties that need expensive structural repairs, which won’t provide significant capital improvements to offset the cost of the restoration. A better strategy is to seek out a property with good fundamental bones, and that comes with bathrooms and kitchens that won’t cost an arm or leg to bring up to date. By buying a fixer-upper with no significant issues, allows you to focus on cosmetic renovations that visually update a property. For example, adding a new verandah is more than a cosmetic restoration, and will be relatively costly. In contrast, it might be considered a cosmetic improvement if the verandah floor only requires retiling.
Before buying a fixer-upper, check whether the local council’s planning department has renovation restrictions in place. You might the local planning regulations either will not allow you to extend the property or build beyond a certain height. Also, check whether it’s possible to remove trees from the property if that is part of your makeover plans.
If you are looking for a house to renovate or would like some cost-effective makeover tips, contact your local Raine & Horne office.