Steps to A Renovator’s Dream–Part One

In a world where we are so used to having all of our purchases wrapped in a shiny package and marketed to us in such a way that makes us desperate to have whatever’s selling, a fixer-upper (often referred to in real-estate jargon as a ‘renovator’s dream’) can at first fail to make that impression that makes us reach for the cheque-book. In fact, it is this very reluctance on the part of property buyers to invest in something that can’t immediately see themselves in, that makes the fixer-upper such a valuable investment property. If you are in the market for a renovator’s dream, there are some things to keep in mind that can help you get a great deal that pays dividends down the line.

Location, Location, Location.

In today’s property market, location is what you pay for, regardless of the sate of the home. A 1-bedroom shack in a prime real estate area can be worth double or triple as much as a five-bedroom estate on the outskirts of town in a less-desirable area. For this reason, you should buy in terms of what a home will be worth after, not before the renovation has been completed. Always choose a fixer-upper in the best area you can afford, otherwise the money you inject into the renovation may not be recouped after resale. Another option is to buy in an up-and-coming area. This, of course, is the real-estate holy grail; to find something in an area that is just about to boom, so it’s never a cut-and-dry decision, but there are a tips you can employ, such as:

1. The ripple effect. A property in a suburb right next to one that has recently experienced a boom in prices is often a good bet, as the overflow of demand for these ‘boom’ suburbs generally spreads over to the surrounding areas as well, much like when a rock is dropped in a pond and causes ripples to move out in concentric circles.

2. Council Plans. If you have knowledge of a development happening in an area–perhaps a new shopping complex, a new school, a big development or a new access road, it can be a great investment to buy property there before it happens. After a big development, more jobs are brought to an area, increasing the demand and therefore pushing up prices.

Sound Structure

Another thing to consider when purchasing a renovation project is to make sure that the building is structurally sound. Unless you are a property developer or are planning to entirely demolish a building, you need to ensure that the structure has not been compromised, nor will it be from any additions or renovations you plan to undertake. It’s simply not financially viable.
For more information on how to choose an investment property that is a renovator’s dream, check out part two of this blog!

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