Buying with the Intention of Renovating
Many of the clients I meet with find me because of their desire to renovate a property. They have been faced with the reality that when purchasing a home, compromises will inevitably be made to stay within their budget, desired location or timeframe for making a move. Having combed through the market and come up short of options, they are willing to explore the idea of renovating a property to fill the void they are searching for.
Fox Homes was born to fulfill this unique niche in the marketplace. While we service buyers and sellers of every variety (really!), we bring an additional layer of service to those looking to customize or tailor a property to suit their needs. So what does this process look like when going into a purchase with the intention of renovating? I’m answering your frequently asked questions below.
First things first, you need to know your budget.
Just like a traditional home purchase, you need to know the budget you are working with. Your lender can structure your home loan to be made up of two parts – funds for the purchase of the property and additional funds for renovating it – all wrapped up into one monthly payment. However, the numbers need to make sense – the amount of work needed on the property and the purchase price of the home need to fall within that magic threshold. A home may be a perfect candidate for a makeover, but if the purchase price is too high or the amount of work needed is too great, it’s easy to end up over your budget and subsequently, out of your league. Your budget serves as a road map to guide you not only in the property you choose, but the scale of renovation you perform.
Is every home a good candidate?
Whether or not a home is a good candidate for renovation means striking the right balance between your priorities and the market conditions in the area. Most of us don’t want to sink a large sum of money into a home unless we know that it will increase the value allowing us to recoup some or all of those funds when we sell. With that in mind, not every home is going to be a good candidate and a thorough assessment of comparable sales in the neighborhood should be performed.
Have the right team in place.
There are limitations with every renovation whether they be from a budget perspective, structurally speaking or a combination of both. The last thing you want to do is purchase a property with the intention of renovating only to find out the vision you had for the space and your budget are completely out of synch. For this reason, I rely on my team of professionals to intervene early in the decision making process – often before an offer is even submitted. Having a clear vision for what you can accomplish and a solid grasp on the costs is critical to evaluating whether or not the home is the right fit for you.
Inspections are critical.
The biggest risk you take on when renovating a property is the unknown. There will be surprises that turn up unexpected expenditures, but a thorough inspection can certainly help keep them at bay. Big ticket repairs that require immediate attention like sewer lines and structural defaults can quickly jeopardize your budget leaving you short of renovation funds. Identifying these shortcomings during your inspection contingency period enables you to request seller repairs, concessions or in extreme cases, a cancellation of the purchase agreement.
Orchestrate the plan.
Renovating a home isn’t a walk in the park. There will be challenges and plans will evolve as limitations present themselves. This is all par for the course – but having a responsive, professional, experienced team in place can alleviate a lot of the anxiety that accompanies each obstacle. That’s where my experience really pays off for my clients. Having been renovating properties for the past 14 years, I’ve been through my fair share of sub-par contractors. What I’m left with is an established network of trusted partners available to my clients. I’ve done the leg work of establishing relationships and quality control. I stand behind the work they do and recommend them with the highest regard.
My team includes:
Wood floor refinishing
Interior design and more…
If renovating a home, whether it’s one you own or one you intend to purchase, is on your radar, I’d love to sit down with you and talk more about the process. Getting to know you, your goals and the vision you have for your project is the best way for me to connect you with the right people for the job. Feel free to reach out to me directly at firstname.lastname@example.org or visit my contact page for more.
Grappling over the decision of whether to move or renovate your current home? Check out this post here.