My husband and I own a home built in the 1950’s and have been fixing it up over the last 4 years. If you are thinking of purchasing a home that needs major remolding or repairs, here are 9 things I wish I would have thought about or known before I purchased a home that needed MAJOR updating:
- Older homes typically need new plumbing work (ie. new water pipes and sewer pipes). This can cost a lot of money to replace and unfortunately, it is a repair that you do but don’t necessarily get to enjoy (unlike a kitchen remodel, landscaping, etc). For example, we decided we wanted to add another bathroom to our home and just to redo the plumbing for that area of the home cost us over $1000.00
- I would check to see if the electrical outlets are grounded (with 3 prongs). Our home needed to be completely rewired which fortunately for us, we could do ourselves. But if we wouldn’t have been able to, it would have been a major cost to us.
- Is the electrical service panel updated to a 220 amp? An updated electrical service panel will allow you to use more electricity without overloading the panel. Unlike the era in which these older homes were built, we have more gadgets and electronics that require more electricity (computer, lights, dryer, stove, refrigerator, etc.). To replace a service panel could cost anywhere from $2000-$4,000 depending on the job.
- What other items does the home need? This list could include, but not limited to:
– Kitchen remodel
– Bathroom(s) remodel(ed)
– Flooring (hardwoods, carpet, tile?)
– Roof & Gutters
I would make a list of everything you want to do and start figuring out how much each item/repair will cost you including labor and materials.
- Establish a budget. It is very easy in the midst of a home renovation to go overboard and splurge on different items. If you splurge on something make sure you can justify it. Working within a budget will ensure that every item you want to fix/change/repair/replace will get done.
- Make sure you have more money than you initially budgeted for. I can promise you during a project, you will need to attend to something you didn’t initially think about or budget for. It happens. Trust me.
- Don’t over improve your home. Make sure that there are comparable sales in the neighborhood to support your after improved value. For example, if you purchase a home for $250,000 and put in $50,000 of repairs, there should be comps in the neighborhood to support a $300,000 value or more.
- The biggest hurdle we had was living in our home while doing our renovation. If you can do the renovation work before moving in, it can potentially be a lot less stressful. Last summer we decided it was time to refinish the hardwood floors. Because our home is 95% hardwoods we had to move everything out of the home. They look great but it would have been easier to do it before we initially moved in.
- Last but probably the most important is to know it costs a lot of money. Make sure you are not putting yourself in a financial position where all of your money goes into your home. You still need to live, enjoy life and not be house poor.
By the way, there is a great loan product for renovating homes. Check out a blog I wrote that was featured on Realtor.com regarding this loan: http://www.realtor.com/blogs/2010/07/04/help-for-home-renovations