Should You Buy a Property that May Need Expensive Repairs or Upgrades?

Imagine you’re shopping for a new home and come across a listing that seems ideal. It’s in a great neighbourhood. It has all the characteristics on your “musthave” list. You can see yourself living there. However, there are a couple of serious maintenance issues that are likely to need attention within the next year or two.

For example, the roof shingles need replacing or the wiring needs to be updated. Those fixes are going to be expensive. Does that mean you should take a pass on making an offer? Not necessarily!

While it’s nice to buy a home that is move-in ready (or close to it), it can be advantageous to purchase a property that needs some repairs and upgrades!

Depending on market conditions, a home with such issues may be priced lower than comparable properties. So the money you save can be put towards the work. In addition, other buyers are seeing the same issues and, as a result, may not make an offer. That means fewer buyers and less competition! On the other hand, you need to weigh those advantages with the estimated cost of the required repairs and upgrades. Will you have room in your budget to get the work done when the time comes? How much will that work likely cost?  Do you need to do all the repairs immediately?  Chances are, you can get a rough estimate of the cost of the repairs and upgrades required before you make an offer and possibly some of the repairs can be completed over time! 

The bottom line is, you need to get all the information you can and then make a strategic decision. Often, it is worth purchasing the property.  Have questions?  Give me a call!  

Two of the biggest stressors for DIYers (Do it your selfers) are projects that cost too much or take too long.

Unfortunately, there’s no sure way to guarantee that one or the other (or both) won’t happen. But there is a lot you can do to minimize the probability.

When budgeting, a big mistake DIYers make is not considering the little things. For example, you might budget for drywall panels but neglect to include the cost of nails, tape and plaster or the insulation behind the drywall! It's easy to overlook these small items thinking they won't add up to much of an expense. But often they do. In fact, for many renovation projects, the little things account for up to 20% of the cost! 

Another expense that is often overlooked is taxes. When you find a bathtub you like for $399, be sure to budget for what you'll actually pay out-of-pocket. Also, don't forget possible delivery expenses. A budgeting tip many experts recommend is to price everything you need and then add 10%. That gives you a buffer.

Regarding scheduling, consider whether or not you've done this type of project before. If you're laying hardwood floors for the first time, there's a learning curve. You'll likely take two or three times longer than you would if you were more experienced. Even if you have experience with the type of project you’re undertaking, it's human nature to underestimate how long it will take. So, if you feel confident you can install that sink in an hour, give yourself two. A lot of this, of course, is common sense. But if you take a common sense — rather than an optimistic — approach to budgeting and scheduling, you'll stand a much better chance of your DIY project going smoothly and costing what you planned it would cost (or closer to it!). 

If you're thinking of doing a renovation, and are wondering what would be the best return on investment, contact me!