That’s why many Canadians look for properties that may not have all of what they’re looking for but with a little (or a lot of) work, can become their dream home – call them the diamonds in the rough.
“Look at where the real value of the home is.”
Fixer-uppers come with many unknowns, and it’s not always easy to tell if a home is a gem or where to spend you renovation money first. Fortunately, RBC has partnered with Bryan and Sarah Baeumler — stars of HGTV Canada’s Bryan Inc. and bonafide experts on home improvement. Having seen and renovated hundreds of fixer-uppers over the years, these two have some great insights and advice for buyers looking to invest in a “home with potential.”
Here are five things to consider when buying a fixer-upper:
1. Look at Where the Real Value of the Home Is
In other words, don’t just look at how pretty it is — or how pretty you think it can be. Instead, evaluate — and invest in — the home’s longevity, functionality and value. Bryan’s candid advice is this:
“If you’re buying a fixer-upper and you want to fix it up just to make it pretty, you’re wasting your money. Put the value into the longevity, the efficiency, the health and safety of that property. It may not look as pretty, but it will certainly operate an function and be more of an asset long-term.”
2. Be Wary of a Finished Basement
Some sellers do some of the ‘fixing up’ before they put the house on the market, to better showcase of the potential of the home — and many will finish the basement in an effort to sell the home faster and/or for more. The reality is, however, that many sellers don’t get the right permits and take shortcuts on insulation, focusing instead on the aesthetics. Bryan’s advice: Don’t be fooled!
Protect how far you've come: When you have an RBC mortgage, help protect your mortgage and family against life's what-ifs, choose the security of HomeProtector® Mortgage Insurance.
3. Get a Home Inspection. Then Follow Up With a Contractor
No matter what kind of home you’re buying, it’s always important to get a home inspection. An inspector will evaluate the structural elements of the home, and inspect the roof, plumbing, electrical, heating and air conditioning systems, assessing the overall function and safety of the property.
But if you’re looking at knocking down walls, digging out the basement or adding another level, an inspector doesn’t have the level of expertise required to advise you on the feasibility of such major renovations. A contractor, on the other hand, will look at things with a different eye. He or she will be able to tell you how much it would cost to break down a wall — if you can even break it down in the first place — and give you a rough estimate of the work required to transform the home.
4. Be Emotionally and Financially Prepared to Take On the Project
Renovations aren’t often easy, and Sarah Baeumler offers these insights:
“It’s challenging to go through a renovation. It’s hard emotionally, and it’s sometimes hard on your pocket book. You have to be prepared to make that time commitment and that financial commitment.”
She emphasizes that homeowners need to make their renovation a top priority while it’s happening, be ready for the inevitable challenges that will arise, and be able to roll with changes and surprises as they happen.
5. Don’t Buy at the Top of Your Budget
When you’re buying an older home, you never really know what’s going to be behind the walls. For that reason, Bryan and Sarah caution buyers to leave enough room in their budget to deal with surprises, changes of heart and new ideas.
For those buyers who are up for the challenge of fixing up a home, buying a fixer-upper and completely transforming it can be a highly rewarding experience. Just take these words of wisdom to heart, and go into the process armed with enough information, resources, and flexibility to really make it work. The right contractor makes a pretty big difference too.
Ready to search for that fixer-upper home? Start by getting a personalized estimate of how much home you could afford in just 60 seconds.
This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.
