These days, many buyers think a bargain is possible if they buy a home that needs renovations. Unfortunately, even in Edmonton, this isn’t always the case. Buying a home with problems you believe you can repair often involves hidden costs you may have failed to estimate at the outset. As a result, getting a great return on your investment won’t always be as easy as you’d hoped.
First, take a look at the house carefully. Think about the current problems, and add the selling price of the home to the renovation estimate costs. Try to estimate high when it comes to these costs, and if labor is involved, be sure to include that as well. From there, think about what the home’s selling price might be after you’ve made the renovations. Look at other similar homes in the area to help you determine this number. Subtract the cost of your purchase price and renovations from the home’s potential selling prices to come up with a good number for your offer.
Second, be sure your contract includes an inspection clause. There are several things you could have missed in your own evaluation, and understanding whether the home has serious structural damage, overwhelming plumbing problems, or something similar may be the key to helping you decide whether this is truly a project you want to get involved wit.
Finally, be sure that you have the funds to handle your renovation projects. If they’re fairly minor repairs, a major credit card should help with the funding. If, though, you have extensive work to do, you may need to take out a renovation loan through a mortgage broker. To learn more about funding your investment property, take a look at this helpful video.
For more great tips, be sure to keep an eye on our blog in the days to come.
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Tags: Edmonton real estate, investment, renovation work
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