Looking for a home that you would like to renovate is all about looking to the future potential of this home. Some homes may be in the right neighbourhood but need quite a bit of updating. Perhaps you would like to buy a home and do some work yourself in order to increase the value and build your equity. Alternatively, perhaps you want to fix the home up and sell it once the renovations are complete. Here are some tips for buying a home to renovate to help you know that the home you are looking to renovate is the right one for you.
Doors and windows can be quite costly to replace and it’s important to look at the overall condition of the doors and windows before purchasing home. Do they need a fresh coat of paint or new hardware? Do they need to be completely replaced? If the windows and doors need to be replaced you will need to work this into your renovation budget.
If looking at buying a home to renovate and sell once the renovations are complete , it’s important to find out how popular that style of home is. For example is it a two bedroom home amongst four bedroom homes? Some smaller homes are in an area that demands homes with more bedrooms. This can be due to the home being in a family orientated neighbourhood.
This home may be more challenging to sell regardless of how good it looks. This is because the home is not able to meet many of the purchaser's needs in that area.
You can speak to a real estate agent to find out what types of homes are selling the most particular neighbourhood. If looking to buy in the suburbs it’s important to find a house with multiple bedrooms. If looking for a condo or townhouse then having less bedrooms may be possible.
Also, depending on the house or lot size, there may be the option to add bedrooms to the current home which can help add value.
Perhaps some extra space in the kitchen could be turned into a pantry. Also, a den that could be used for a bedroom or a home office. Perhaps the attic can be converted into another bedroom or recreation room and so on. By looking at a home for not only what it currently has but also what it could be changed into is a great idea.
With a purchase plus improvements mortgage you can work up to $40,000 in renovations into the mortgage at time of purchase.
Learn more: Purchase Plus Improvements mortgage
When walking through the house it’s important to look at the flow of the home. Having a layout that works for you or that is possible to change into a layout that can work for you is great. If looking at the home with the intention to move walls etc. it’s important to look to see if that is possible. Some walls may be load-bearing.
If the areas of the home feel dark and cramped, taking down walls may be an option. Also, adding more windows or skylights.
The more the existing layout meets your needs, the less you’ll have to spend to change the layout. Some layout changes however can be easily done and with the right knowledge or help and should not be feared.
Talk to a mortgage broker in Ottawa today to review your renovation budget and find your pre approval amount for buying a home to renovate.
Learn more: Mortgage brokers in Ottawa
Most interior renovations may not need approval from the city, etc. However, if looking to add another story to a home or increase the living space by extending the home more into the yard, this may require approval and/or permits. If the property already meets your current size needs, this can save you quite a bit of money. Also to save you on the challenges that can arise with needing to apply and be approved for the various permits and so on.
Learn more: City of Ottawa
Problems with the structure or the foundation of a home can mean big dollars when looking to get this fixed. This can also slow down the process of your renovation timeline. Unless you have a thorough knowledge with this type of renovation or improvement or know the right people to call and have worked it into the budget, it may be best to find a property with a strong foundation.
For larger renovation projects there are construction mortgages that may help for costlier projects:
Learn more: Construction mortgage
Sometimes it can be hard to see a home's possibilities in its current state. It’s important to have the right vision of how the property can come together in the future. Sometimes drawings or computer programs can help with seeing how the property will look once the changes are made. Replacing old carpet and painting walls can quickly and cost efficiently change the entire feel of a house.
Many buyers who are not looking to renovate may be deterred from buying these homes. This can help with your negotiation and getting a great price.
If there is one property on a street of beautiful homes that needs some improvement. You will quickly see that by improving this property it can become like the others. With that, it can have the same value as the other properties. It’s also easy to see what the property will be worth once the improvements are made. The other homes on the street can be used as your benchmark for the future value.
For all your home buying mortgage needs, talk to a mortgage broker in Ottawa today.