If you’re just getting into real estate, a fixer upper project probably looks like a safe bet for you. Not only is it miles cheaper than a new build on the same market, but you could make an amazing return that’s at least double the value – what could go wrong?! Well, many things if you haven’t sorted the budget, so check out our tips below.
Survey the Damage First
It’s impossible to create a renovation budget without knowing the extent of the damage first. You can’t just spy a house from the outside and think that $50,000 you’ve got in the bank will be fine! You need to call in a proper surveyor with professional equipment and get a full report done. It might be an upfront cost you’d rather not deal with, but 9 times out of 10 it’ll save you a lot of money over the lengthy renovation period! Would you rather take your chances without one? We say no!
Compare Contractors Very Carefully
Not all contractors know what they’re doing. Because of that, you absolutely have to choose the right one! Someone who’s going to make good use of your money without misallocating resources – a lot of people find it easy to make mistakes when they’re not footing the bill! And working with the wrong contractor could cost you your entire savings pot, so be stringent about who you hire. Overall, you don’t want to use up more than 20% of your total costs in hiring.
Don’t Cut Costs on the Supplies
Supplies for your project should be high quality yet affordable, locally and sustainably sourced where appropriate, and come from a reputable supplier. And this process will take time, so try to be patient here. Many of the nearest Timber supplies to you will be of good quality, and you might think it’s fine to choose at random from the list.
But you shouldn’t just sign with the first merchant you come across. Do some digging into the company itself and how they operate, and then look at plenty of reviews. Ultimately you’ll be spending around 50% of your total budget here, so you won’t want it to go to waste.
Anticipate Mistakes
A lot can go wrong with a renovation; you could use the wrong supplies, install the wrong parts, work with a cowboy tradesperson, forget the rulings of the survey, and then end up rushing the work in the end. All this adds up to a project that’s doomed to fail and will be costly to make right again!
So have a little spare in the funding pot. Around $8,000 to $10,000, just in case something needs to be ripped out and reinstalled due to bad wiring, plumbing, or terrible work all round. And during a first project, that’s more common than you might think.
Got a fixer upper you want to get started on? Audit your budget plan first to make sure you use it right.
