Buying a Home to Renovate: What You Need to Know

Feb 5, 2016

Buying a Home to Renovate: What You Need to Know featured image

There is an unmistakable charm about older homes from decades past. The only pitfall is that, along with their ancestral beauty, comes age-old wiring, plumbing, and other facets of the house. If you consider this to be a labour of love, then here are a few things you ought to know before delving in and buying a fixer-upper!

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Do The Math Before You Renovate

As mentioned, buying a fixer upper can be a labour of love. Oftentimes an expensive one at that! Therefore, it’s important to take into account all of the potential costs that you will incur. Here is the suggested math to use when making an offer, courtesy of This Old House:

First, add up the costs to renovate the property based on a thorough assessment of the condition of the house. Be tough with this estimate, which should include materials and labor — yours and other people’s.

Next, subtract that from the home’s likely market value after renovation, drawn from comparable real estate prices in the neighborhood. Then deduct at least another 5 to 10 percent for extras you decide to add, unforeseen problems, and mishaps that have to be dealt with, and inflation. What’s left should be your offer.

Purchasing and restoring an old home is no walk in the park, both physically and financially. It’s extremely important to make sure you have your finances in order, along with some wiggle room!

Hire a Reputable Home Inspector

Even more important than a solid realtor, is having a solid home inspector. When searching, it’s imperative that you stipulate that you’re looking for older homes, and that you’re looking for someone who specializes in this area. To ensure you’re getting someone who knows their stuff, ask for references, and chat with former clients. If the inspector is unwilling to give references, it’s best to move on and find someone who is able to back up their work. Also, make sure to go through the house with the inspector and have him tell you aloud what he notices in the home. Regardless of whether you buy the home, you will learn lots about old homes, and what to look for.

These are the main areas of a home you want to look at:

1. Structure – Will it stand up
2. Membrane – Roof, cladding – Will it keep water out and heat in
3. Foundation – is the basement dry? does it have cracks
4. Electrical – Enough power, and properly wired
5. Plumbing – Leaks and pressure
6. Heating – Primarily this is the age and type of the furnace
7. Doors and Windows – These cost more than you think, so get an estimate before buying

Mix and Match

When you’re looking at an old home, the ideal find is one that requires primarily only cosmetic fixing up. However, this isn’t always the cards we are dealt. Sometimes inconveniences, such as wall rot, can wreck havoc on renovations, timelines, and especially budgets. What’s important is to know when to combine forces. For example, if you already have to fix the roof, then why not add a skylight while you’re at it. If there is wall rot in an area of the house, might as well add that bay window you’ve always wanted. Know when it’s smart to combine renovation efforts to get the maximum results.

Pay to Play

When buying a home, you need to know what you’ve signed up for. Especially if you’re on a budget, it’s always in the home buyers interest to pitch in, and help out with the renovations by rolling up their sleeves! This ensures that you know exactly what’s going with the renovations, and makes it more likely you’ll be totally satisfied with the outcome. On the other hand, if you’re really opposed to getting down and dirty, be prepared to devote copious amounts of time to closely monitoring contractors.

Weigh the Options

As you’re sitting here reading this over, really take into account what you’re getting into. Are you prepared to to live in a construction zone for the next few months? Delayed deadlines? Intense renovations can be a serious strain on home and family life so its important that this is a family decision. Old homes aren’t for everyone! If it’s not going to be a labour of love, and your whole family isn’t on board, oftentimes it’s not worth it.

Weighing your options in your upcoming move? Take a look at some of the beautiful bespoke townhomes we have to offer!

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