How to Spot Potential for Home Renovation - 10 Tips!

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Brown & Brown e-Newsletter by Garth Brown Send this newsletter to your friends Return to newsletters HOW TO SPOT POTENTIAL FOR HOME RENOVATION – 10 TIPS! Spotting Home Renovation Potential ...We originally published an eNewsletter on this topic in November 2011 – please check our archive section http://www.conveyancers.net.au/email41/newsletter.html But since then we have many new Clients and many new eNewsletter readers and the subject keeps coming up so let’s start the 2014 year with some updated information on how to “spot renovation potential.” You have in your mind that buying a home with potential for renovation is the right way to go. This may be your Family home and you will need room to grow; or it’s an Investment property and you want to buy cheap, renovate and make some money. Here are 10 Tips to help you in your decision making process. 10 TIPS! 1. Planning - Terms like “Renovator’s dream” and “Ripe for renovation” often fire the dreams of homebuyers and investors but the dream of renovating an old house and turning it into a Family ‘castle’; or a savvy investment and making a good profit can often turn sour for the naïve buyer. To get it right means doing your due diligence (homework) and knowing the market; then knowing how to renovate in line with the building’s style, location and of course your budget. 2. Budget - Before you go out and find the property of your dreams, first have your Budget firmly established. Your budget should cover every possible cost, include: 1. Purchase price; associated purchase costs i.e. legal and other fees. 2. Cost of moving or paying mortgage or rent elsewhere while renovating. 3. Renovation expenses (with rising costs this can be hard to fix always add 15-20% over to guard against the unexpected). 4. Interest on home loans and sale costs (for the Investor). 5. Contingencies’  Generally an all-inclusive budget is the best method to assess the viability. Depending on your reason for buying a property with renovation potential if the total cost outweighs the likely sale price and you over-capitalize the rule of thumb would be “it’s probably best to walk away 3. Find a Good Real Estate Agent - As we have encouraged many times before find a Real Estate Agent you can trust in your chosen area/s and talk to them honestly about what you are looking for, your budget and how they can assist you.  4. Know the Property Market - It’s important for you to know the property market as that will also help in your relationship with your Agent, the best way to do that is to attend auctions; analyze recent prices and private sales; and be prepared to take your time if the right property with potential for renovation is not already on the market in your chosen area. 5. Find the Right Property - The ideal property will depend on your renovation plans – whether it’s a quick makeover or something bigger and more extensive the same home buying rules still apply. Location, location, location: identify the best street and suburb for your type of renovation potential, it’s often been said that the “worst house in the best street” can be the most lucrative for capital growth in the long term. If you are an investor you usually get a better return on your investment from a smaller house in a great neighborhood than from a fancy house in a so-so neighborhood. 6. Signs of Potential – To find the homes with great potential, you must screen for qualities that make a worthy investment and for problems that could suck a hole in your savings. Experts generally agree that extra bedrooms and living spaces add the most value. Going outwards is easier than adding an upper floor. Plumbing is very expensive check where the master pipes are and if adding a bathroom or toilet will mean major work as that can put a big dent in your budget. 7. What to Look for  • Structurally sound and in good condition • Good basic layout that will suit a renovation and/or conversion to modern living • Timber floors and/or period features • Potential to create city or water views • Space to extend without incurring opposition and delays from neighbors • Rarity value (location, style of property, architect design, landscaping) • Well sited (preferably north facing) on a good street 8. Beware of Mold and Mildew – Many unsuspecting prospectiverenovators have been caught with hidden mold and mildew. Water is always the cause of mold and mildew, but finding the source of the problem can seem like an unsolvable mystery. This is where Professional help before you buy can save you a lot of headaches, time and money. 9. Professional Help – Once you’ve found a property before making a move, get input from qualified professionals, rising building costs can turn a dream into a nightmare for a renovator without experience. The cost ofrenovating will depend on the property’s condition always get a professional building inspection. It also pays to get architectural advice if structural changes are involved and check with the local council to ensure any planned structural changes do not violate planning regulations. 10. Buy Wisely – As a Renovator, if you buy wisely you have the potential to boost your personal wealth significantly, if you don’t there is also the potential to lose a big chunk of your capital and no one is in a position to lose money!  GARTH BROWN’S COMMENT Where you make money in property renovation is when you buy this is critical - the right property and the right price coupled with an all inclusive estimate of potential costs down the line – pay too much at the beginning and underestimate renovation expenses and it is hard to recover. Always carefully consider the Pros and Cons on buying a property for renovation, especially if it is your family home. The hidden costs include time and inconvenience. I’ve known of families who bought a “renovators delight” and have ended up years later still living in an unfinished house having run out of money and fed-up with the whole process. If you are a first time investor in the renovation market do your homework and don’t let the glitter of the home renovation programs on TV make you think “If they can do it, so can I”, these TV shows have Producers and highly trained professional trades people behind the scenes. Brown and Brown ConveyancingWith over 16 years experience in Conveyancing and Real Estate matters we are well placed to handle the conveyance for either Vendor or Buyer. Our up-to-date website is full of practical advice and information on selling and buying including an archive of our eNewsletters for easy reference. And for the convenience of our Clients we have established easy methods to contact us through our new Mobile website and Information Hotline, here are the details: Mobile WebsiteTo facilitate our Clients busy on-the-go lifestyle we have recently launched our purpose designed mobile website for use on all mobile devices, please go to: http://www.conveyancersmobile.net Information HotlineWe have established a new information hotline for your convenience, just call: 1300 ASK CPC Please do not hesitate to contact me for your first obligation free consultation. Thank you for your referrals! Garth Brown • send this newsletter to your friends • We appreciate your referrals. Next eNEWS: 'Bet on a Long Life' - March 2014 In the meantime keep in touch with Garth Brown on   Youtube   Facebook   Linkedin   Twitter Garth Brown Endorsement.  . . . . . . . . . . . . . Thank you again for your valued custom. License No: 1055854  We appreciate the referrals. . . . . . . . . . . . . . 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