Published at: 6/21/2016 3:29:33 PM
A home in need of love can tug at your heart strings. But unless you’re careful it can also drag on your finances. We explain ten steps to prevent a rundown home leaving you financially skewered.
1. Talk to your lender
Don’t assume you’ll get a loan just because a home is cheap. If a property is in need of major repairs it may not pass muster with the lender’s valuation. In the worst case scenario that could mean losing your deposit. Contact your ME Mobile Banker to discuss whether a property you’re thinking of buying could hit hurdles at valuation time.
2. Arrange a pre-purchase inspection
A professional pest and building inspection will show up all the faults on a property giving you a warts and all idea of exactly what you’re up against. A poor report isn’t the end of the world – it can be a useful tool in price negotiations.
3. Take off the rose coloured glasses
There’s something romantic about the idea of restoring a home to its former glory. But before you start creating a Pinterest wish list, make no mistake that major renovations can be hard work. Be sure you’re up to the job.
4. Crunch some numbers
Consider asking a licensed builder for a quote on the likely cost of renovations. You need to go into the project with your eyes wide open.
5. Contact the local council
Building regulations have changed in many areas over recent years. You could face solid restrictions on what you can do to the property and what you must do as part of a refurbishment.
6. Check your budget
Be honest with yourself about whether you have the funds to pay for renovations. Even small projects can dish up cost blow-outs.
7. Don’t overestimate what you can do yourself
Unless you are a tradie or you have excellent DIY skills, don’t assume you’ll save money doing a large chunk of the work yourself. A professional finish not only enhances the value of the property, it ensures your home meets council building standards.
8. Be wary of overcapitalising
The last thing you need is for your planed renovations to cost more than they add to the value of the property. Speak with local real estate agents to get a feel for whether you’re planned improvements will add genuine value.
9. Keep one eye on the future
Be sure your renovations reflect what buyers really want. After all, at some stage you’re likely to sell and upgrade to your next home. Research by Finder highlighted the home features people are willing to pay for. Air conditioning (65% of respondents) and a carport or garage (60%) top the list.
10. Shop around
Give tunnel vision a miss. Take a look at plenty of other homes in your price range. It’s a fair bet you’ll see other homes that are liveable right now. It could let you enjoy a relaxed lifestyle free from dust, noise and the stress of renovations.