Should you buy a fixer upper or a move-in-ready home?

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Posted on July 21, 2015

** Don’t miss my interview with Mark Eilers, with Team Finney and Remax, talks about how to get the most out of your home investment. Click HERE to view video.

 

Choosing to renovate a fixer-upper can be a great investment. This can be an ideal way to get into the neighbourhood you want or a larger house that you otherwise couldn’t afford.

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Who wants to pay nearly 20% more for a move-in-ready home with someone else’s idea of good finishes, design, and layout? As well GST is applied to the price of new homes and will increase your overall costs significantly. The Appraisal Institute of Canada states that you will see a $75 to $100 return on your investment dollar with kitchen and bathroom renovations.

 

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Rule #1: Buy a fixer-upper at a cost far below the rest of the houses in a good neighbourhood. Your renovations should not raise the value of your house more than 10 to15 percent above the median sale price of other houses in your area, according to the National Association of Home Builders. If your renovations price your home out of the market you will likely not recoup your costs.

 

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Rule #2. Find a fixer-upper with quality construction. 

If you are planning on renovating an existing home make sure it is one with good bones. Be sure to get an inspection that will bring light to any potential hidden issues with the home. A home that is worth renovating is one that has architectural elements that you want to remain in the new design. As well a floor plan that is close to what works for you. Excessively moving plumbing and walls will make your renovation budget skyrocket.

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If the project goes over budget because of mistakes or unnecessary delays your financial gains could be wiped out. See how hiring and Arden Interiors can actually save you money on your home renovation, click HERE!

Check back for my next blog post to learn the best ways to finance your renovation with The Mortgage Pug.

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