Acquiring a new home is a big decision. Not only does one invest a lot of money but they also have to make sure it becomes a great home.
Buying to renovate has become more and more popular as a way of owning a home. Some people do it as a business. But unlike buying a new home, buying property to renovate is more complicated. You have to carefully consider a number of factors that determine whether or not you get a great investment and home.
If you are a first time home buyer, here are a number of important things to know to get it right the first time:
Location matters
If you have already started viewing old houses on sale, you agree with us that the more houses one sees the harder it gets to settle on one.
Let’s make things simple for you. Follow the old adage of choosing the not-so-good house on a good street. This rule really helps when buying a house to renovate and there are solid reasons why many people use it. The logic is that it is safer and more sensible to upgrade an ordinary home to a nice one that fetches the street’s value than to have an okay house on a bad street.
Close proximity to social amenities (such as schools and hospitals) is another factor that you should consider.
Keep a keen eye on your budget
Most people get so excited about buying the house that they forget they will have to spend more money on renovations. Therefore, set and keep your budget limits from the word go.
When you come to renovations, spend your money on the things that matter first. There are basically two types of renovations: cosmetic and structural. Cosmetic renovation focuses on improving the visual appeal but not necessarily the value of the house. Structural renovation aims at changing or improving the design of the house.
Ideally, you should go for a house that only requires cosmetic work because the costs are lower than those for structural renovation. However, there’s a possibility of getting a house that needs both types of renovation. For such a house, structural renovation is what you should prioritize. Invest in functional aspects of the home such as the kitchen and bathrooms as these are going to be useful especially if you plan to move in right away.
Let a professional inspect the building for you
Various issues can significantly increase your renovation costs. It is prudent to have inside out knowledge of the building you are just about to buy and renovate. Issues such as age of plumbing or wiring and how easy or difficult it is to make structural modification will help you to accurately budget for your renovation costs. Things to inspect include:
• Structural integrity issues – these constitute hidden costs
o wall cracking
o drummy plaster
o door frames that aren’t square
o floors that aren’t level
• Electrical wiring
• Plumbing
• Asbestos removal
• Termites – a building and pest report might be required
Another crucial thing to check is the orientation of the building. Is it shadowed by a bigger block or nearby trees? And if there are trees, can they be removed from the property when needed?
4. Are there limitations for extension?
If you are planning to extend the house, make sure that the property does not have limitations on what you can do. Some old properties have severe limitations on extension.
Check the contract and identify easements that may hinder you from extending the house, for example, drainage. Also check the Floor Space Ratio (FSR), setback and height requirements. These will help you to know if you will be allowed to extend the building.
Invest enough time in your home buying and renovation project to ensure that you end up with a great home without spending too much money. Hopefully, these tips have opened you to first time home buying and you will get it right once you come to the actual project.