There are people who love to buy old houses and work on them to improve or renovate the property to suit their requirements. One can get a house below its market price and, with some renovation, the cost of that house can be doubled or more.
General view on what to pay attention when you are buying an old house
This may sound quite good but first you need to evaluate the property and then strategize on how to get to the finished product. According to the CEO of www.homegain.com: If people are unforgiving up front about assessing the costs of renovation, the value of the property and the neighborhood, and how much money they have, they can come out ahead and buy more house than they otherwise could ever afford. Taking all these points into consideration we will show you the various steps which will make the purchase of a fixer-upper pay off.
Costs vs. budget
The first step that you should do is Do the Math, i.e., figure out the overall cost of the fixer-upper. This starts with adding the cost of renovation that is required to invest in your house and while estimating the renovating cost one should do a thorough assessment of the condition of the house. Your assessment estimates should include materials and labor as well. Then subtract the home’s estimated market value after renovation, drawn from comparable real estate prices in the neighborhood which is followed by deduction of 5 to 10 percent for extras you decide to add, the unforeseen problems and inflation.
Tips for the contract
Do not forget to include inspection clause in your real state contract. An inspection will assure you that the house is a good investment; at worst, it will help you back out of the deal. In case of significant structural improvements, many real estate experts recommend avoiding it altogether. The major things that can invisibly increase your budget of renovation are: plumbing and electrical system overhauls, foundation upgrades, and extensive roof and wall work.