Tips for buying a fixer-upper without losing your shirt
Location is one of the most important elements when considering the purchase of a property. Many things can be changed, but the location cannot. Buy the worst home in a good neighbourhood. The surrounding property values will have an impact on the ultimate value of the property and your investment will be sound if, once improved, it will be similar to homes in the surrounding area.
Find a property with a good, logical floor plan or one than can easily be remedied. Moving walls can be expensive, especially if supporting walls are involved. Watch for other potential major expenses, such as cracked foundations, sagging or leaking roofs, water damage, mold and the like. A good home inspector or contractor can give you an idea of what the costs to repair will be. You may want to consult a structural engineer if structural integrity is an issue. If the property is rural, also have the well and septic systems tested to be sure they are operating correctly.
Cosmetic fixes can often give you the most return for your dollar -- painting, new light fixtures, new faucets, bathroom fixtures and tiles, cabinet makeovers, new drawer pulls and faucets in the kitchen. Granite counter tops, steel or tile backsplash and stainless steel appliances are very popular and increase the “wow” factor significantly.
Permits are required for any major building project. A simple renovation or addition will probably only require a building permit, but if the property is near a body of water, a flood plain or conservation area, an additional permit may be required. If you are considering an addition, zoning by-laws should be reviewed to be sure that you have enough room for the size addition being considered. Be sure to check with the municipality to ensure all the necessary requirements are understood, and all of the costs involved. Obtaining professional advice and detailed quotes for services can avoid surprises later in the process.
A home that appeals to the most buyers will be easier to sell. If selling the property after doing the improvements is your intention, look for a property with a floor plan and location that will appeal to the most people. The majority of buyers today are looking for an open floor plan, more than one bathroom and 3 or more bedrooms. An improved home in a nice neighbourhood will be appealing to more buyers and potentially provide a higher return on your investment.
Posted by Martha Marton
on June 14, 2012