- Posted 24 Apr
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Remodeling your home can be a wonderful way to build your equity and make a return on your investment, on top of making your home your dream house. But it is also a huge commitment involving a lot of time, effort, money and patience. In order to make sure you don’t get in over your head, we at Australian Credit and Finance want you to understand all the factors to consider before buying a ‘fixer upper’.
Do-it-yourself Vs. Hiring Professionals
You may consider yourself pretty handy, but don’t let your ego steer the way with this one. Evaluate your true skill level and what you can and cannot do. For instance, start a list of what you are confident in doing, what you must by law have a trade to do and what you will need some assistance with. This will allow you to plan out your budget and allot time for renovation.
Why Am I Renovating?
Is the house you are renovating to live in or sell? That could determine how much you want to put in and how much you want your taste to influence the design choices.
Also make sure to know what to expect if you plan on living in the house while it is being renovated. Living in dishevel, waking up to hammers and 7am tradesmen showing up to start work can be very taxing and stressful.
Be very realistic when it comes to your renovation budget. Paying trades to come and give you a quote prior to purchasing the property is well worth the investment. Having a 15%-20% buffer is essential as project needs and materials can vary once work begins.
Time is money so the more you can do the better. But doing renovations yourself can be taxing on normal life. It’s something you will find yourself doing in all your free time and possibly cutting into work, family and other outside activities.
Research property values in the neighbourhood your home is in. Keep mindful there is a cap on what the property will be valued at and how much someone will be willing to pay. Do not over capitalise on the property because you will lose value and money.
Stress on Relationships
It’s pretty common knowledge that many couples have suffered an end to their relationship when rebuilding a home, but some find it an ultimate bonding experience. Before you start, talk to your partner and become fully educated on what to expect. This will eliminate surprises, time spent with the house verse each other and money costs.
A huge benefit to remodeling your home is property taxes are based on the home’s sale price. Therefore, your biannual property taxes will be less if you buy a fixer-upper as opposed to a new home.
Home buying and renovation, while sometimes overwhelming, can be extremely rewarding. Let Australian Credit and Finance assist you on any home loan or finance you need to make your home buying experience successful.