For many this means finding a cheaper “doer-upper”, which can be a great way to get into the real estate market for less and can end up making buyers a handsome profit in the long run too. However, not every renovator’s dream ends up that way.
Do you have renovating experience?
If you haven’t renovated before then you might not know what you’re getting yourself into. For one, renovating is a lot of hard work and it’s very easy to overcapitalise.
Do you need to renovate an entire house, one room, or does the property just require a bit of paint? Before jumping in head first you need to ask yourself what needs to be done and what this is going to cost you in terms of time, inconvenience and money.
In general, it’s recommended not to spend more than 5% of the purchase price of the property on renovations, so if for example you’ve spent $600,000 on your property, then you should be aiming to spend no more than $30,000 on renovations.
If you have an entire house to renovate then $30,000 can be burnt through very quickly, so you might need to prioritise the areas that need the most work or that will add the most value, such as a new kitchen and bathroom.
Can the property be lived in as-is?
A lot of first homebuyers won’t have enough cash to do any renovations right away though, so it’s important to ask whether the property can be lived in without making any initial changes to the property.
Safety is the most important factor to consider, so even if you are thinking about renovating it is still worth getting a professional building and pest inspection carried out so you know of any issues right away and have the funds available for immediate repairs should you need them.
Overall, it is best to carry out your own independent research on a property before jumping in headfirst. Renovating isn’t for everyone so be aware of your capabilities and whether or not you’re willing to live in a half-finished property. However, if you have the funds and the know-how then renovating can be very profitable and a great way to find a hidden gem in your favourite suburb.
If you’re looking to buy a doer-upper in the Bacchus Marsh region then feel free to get in touch with the Arbee Real Estate team or browse through our properties for sale on this website.