Many buyers dream of getting a great deal on an old house and rehabbing into a show stopper. Before you make the leap, you might want to answer the following 4 questions:
Do the math
Figure out the real costs of renovation. What do you know about assessing structural integrity, insulation, drywall, roofing, gutters & downspouts, drywall, demolition, flooring, carpentry, windows, hvac, electrical and plumbing? Make sure you have a handle on the real costs and plan accordingly. If you’re considering a 203k loan or putting it on your credit card- underestimating the actual costs is the number one reason for people walking away from completing the restoration process.
You versus the Professional Get a sheet of paper and draw a line down the center of the page. On top of one column put your name and professionals over the second column. Now review all the items in #1 that you identified as needing work and using the sheet- honestly make a check mark in the proper column -who will be handing the work …you or a professional? If you over estimate your abilities and underestimate the need for professional help- beware of the costs and end results.
Live-in or live-out Simple question -are you going to try to live in the property during rehab period or can you live somewhere else? If you’re living in-then lay out a plan that allows you some “space” while the walls crumble around you. Unless the property is in fairly good condition I would suggest thinking twice about living on-site….especially if family members are involved.
Permits and paperwork Are you the general contractor or just one of many working on the property, make sure you either take care of all the required paperwork, permits and inspections or make sure the contractor is handling and you have copies. Some day you may want to sell and the first thing buyers usually want to see is the permits- so don’t save a few dollars now only to sacrifice thousand of dollars down the road because you skipped filing the right documents.
House renovations always look pretty simple when you watch them on television-but people who have gone through the process can give you some insight into the highs and lows. If you don’t know anybody who’s worked on a major rehab project-check with friends or your Realtor for names.