But if it appears really run-down, the property may well have more wrong with it than immediately visible, and our advice to sellers in such instances is always to get a professional opinion from a home inspector or registered builder before they sign an offer to purchase.
This does not necessarily mean that you should not buy the property, but once you have an inspector’s report, you will have a much better idea of what it would really cost to renovate the home properly, and be able to adjust your offer accordingly.
For example, if the home needs any structural changes, you will need to include engineer’s and architect’s fees in your renovation budget, as well as those for the actual building, plumbing and electrical work that may be necessary.
In addition, you may have to get plans for any alterations agreed to by the neighbours and then approved by the local authority, which is likely to take quite some time and could mean higher-than-usual holding costs before you could move in.
The bottom line, he notes, is that it is usually not worth taking on a major renovation if your plan is just to complete it and resell the property within two or three years. “Generally, you need to live in a renovated home for an extended period before property values in the area will rise enough to enable you to recoup both your original purchase price and your renovation expenditure when you do decide to sell.
So once again, price and location are key factors. If you are going to buy a home that needs a lot of work, it must come at the right price – and be somewhere you’ll be happy to live for many years.
Courtesy of Gerhard Kotze - Realnet