Even after adjusting for inflation, there is no doubt that the average house prices in Australia have increased exponentially over the past two decades. Prices are now at stratospheric levels. The average price for a home in Australia currently stands at $656,800. In New South Wales, that price currently stands at $865,000 while in Tasmania, where homes are generally cheaper, the average home price is still $343,900.
These mind boggling figures mean that more Australians who wish to own a home are now opting for fixer-uppers to save money. They are buying old homes that are fairly in good shape which they can subsequently renovate. Fortunately for many Australians, there are numerous rundown homes in the market that they can buy for cheap and remodel to their dreams.
But here, too, you have to be careful about the kind of home you are buying. The most critical step when buying a home to renovate is choosing the right home. Here are some useful tips to keep in mind when buying a home for renovations: P.s Also check for dog fences etc. if you own a dog.
The Location Factor is Key
The location is a key factor when buying to renovate. If you are going to invest hundreds of thousands of dollars in buying and restoring a rundown property, then it better be in a great location where you can easily recoup your investments in the future. The property better be in a good street where the real estate market has been showing some strong activity.
You can pour through the real estate listings or talk to multiple real estate agents in your city for a heads-up on the best rundown properties in town. The kind of property that you are planning to purchase should be one that suits your preference and the amount of money you are willing to spend on the renovation. If the property is so dilapidated that you will have to bring the entire structure down, it is going to cost you a fortune to rebuild it and you are never going to recoup that investment.
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Give it a Critical Look
First impressions matter but when you are buying for renovations, you have to look beyond the cosmetic. If the property is an excellent location, look at how much is required to restore the property to a good condition. You must learn to look past the ugliness of the property and spot the real gem inside. A seemingly dilapidated property might in the end not require as much restoration work. Take time to inspect the building and see if it is worth it.
House renovations cost money so you must have a definite budget in mind. How much are you willing to spend in buying the property? How much are you willing to spend on property renovations? Before embarking on a renovation project, talk to an expert to give you a rough estimate on the cost of renovation. When hiring contractors for home renovations, go for those that will give you a definite budget for the project; not moving targets.
Think Long Term
Treat every property acquisition as an investment and as a business even if you are not planning to resell the property any time soon. Ask yourself whether you will be able to resell the property and at what price?
Iron Out the Contract and Planning Issues
It is good to dig a little into the history of the property and carry out proper surveys and inspections to ensure your hands are not tied up by any limitations or regulations. Does the contract have any easements that could hinder your future expansion plans? Are there any council limitations on property renovations in the location? These are some of the issues you should iron out before committing your money to the property purchase.
Don’t Take Up Structural Work
Avoid buying up properties in such a state of dilapidation that they will require some structural work. Structural work is eye-watering expensively and is likely to stretch your budget to the limit. When buying properties to renovate, It’s always advisible to inspect properties for potential foundation issues, like cracks in pavement and walls, tilting chimney or uneven surfaces. Check the windows and doors, too. If they’re stuck, it might be a sign that there’s a problem with foundation. When buying properties to renovate, it is always prudent to stick to those that will only need some cosmetic changes. Go for those properties that have “good bones”.
Buying homes to renovate is never a walk in the park. There are many pitfalls that you will face along the way that could easily see you in the red. Take these precautions and your home renovation project will be a successful and profitable venture.