Often reserved for buyers with building experience or the very bold, a ‘fixer-upper’ property can often prove to be an opportunity for not only a bargain - but a chance to create something that’s totally bespoke!
If you’ve spotted a home that needs a little (or a lot) of TLC, we’ve got the low-down on what you need to know before you sign the paperwork on that ‘rough diamond’ of a property.
Location, Location, Location
When it comes to a home that will require a decent amount of renovation, you’d be wise to find one in a suburb that is already desirable and popular, or ‘up and coming’.
Being near a capital city is a good place to start, and as life gets back to normal post-pandemic, keep your eyes out for those out-of-the-way communities with an element of nature and space, while still being near all-important infrastructure. For example, areas within 45 minutes drive of Brisbane are increasingly desirable, as you can reach your favourite shops, cafes and entertainment but still be out of the ‘hustle’.
Make sure you visit the location and property at different times of day to get a proper feel for the area.
Do your homework
Well before you approach the sellers with an offer, you’ll want to have a clear idea of how much you plan to spend on renovations, and what value-add this will result in for the property.
It’s therefore time to do your research and check out what similar renovated properties are selling for in the area. Try to visit these recently-renovated homes in person and get a visual of common reno-zones like the kitchens and bathrooms.
Ultimately, you’ll need to work out the maximum price that you would offer on a property - with the future renovations factored in - so as not to be stung by mismatched goals and dwindling funds. Why? To ensure that you do not end up living in a half-renovated home that needs to be sold for a steal later down the line!
Spend VS. Save
A fixer-upper doesn’t always require a total overhaul in order to look and feel a million bucks, it’s really about finding the key renovation spots that will impress buyers (if you’re planning on making a profit and reselling) or that will align with your future home goals for yourself and your family.
Beware of spending too much on an area that most buyers won’t focus on, essentially, the dreaded overcapitalisation.
On the flip side, don’t overextend yourself on a property and move above your planned purchase price - this can often lead to cheaper “quick-fix” renovations to balance it out, and buyers will notice this when it comes to putting it back on the market (you’ll also need to replace cheaper fixtures and fittings more regularly).
Get an Expert Opinion
Avoid getting emotionally attached to a shabby home that’s looking for love. Instead, call in the experts to assess a fixer-upper before you sign. Getting your pre-purchase pest, build & legal inspections done in advance will ensure that you’ll be renovating the parts you actually want versus spending thousands on replacing a termite-ridden roof or dodgy plumbing.
Pre-purchase building inspections and legal conveyancing can also reveal if you’ll run into heritage-listed or legal issues that will limit your grand plans to renovate.
Importantly, an objective expert will see the property (and any future problems) for what it is. Don’t simply rely on family, friends and your ‘gut’, and instead let the pros guide you to make a wise purchase that will hopefully end up being a fantastic investment.
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