There's something extremely satisfying about bringing a broken property back from the brink. So satisfying, in fact, that it turns from a hobby into a full-blown career for some. But how can you get started on buying your first fixer-upper? How is it different from purchasing an established property? And what considerations do you have to make for your home loan?
Structure, not aesthetics
When purchasing a fixer-upper, the first thing you will need to recalculate is your real estate priority list. If you're like most Australians that responded to a Real Estate Buyers Agent Association of Australia (REBAA) survey, you might be after an open plan living area, or a butler's kitchen, or plenty of natural light. While that might be a consideration while viewing an established property, when you are buying a fixer-upper you get the opportunity to build these features yourself, so long as you have a good initial framework.
As such, unique features should be less of a concern and you would do better to focus on the base structure of the home. There's a 34 per cent chance that the home will have minor water damage, according to Archicentre, and a 4 per cent chance it could have major damage that would require more than $10,000 to repair. And that's just one kind of structural issue. It's perfectly fine to purchase a property in such a condition, but be aware of the additional costs that will be involved and factor it into your mortgage repayments.
For yourself or for resale?
You might be inspired by the people on The Block and think to resell the home once you've fixed it up. This is a great option for people who want to invest through sweat equity, but you have to be selective on your design choices. While you may not particularly want, say, two or more living areas, but that was among the top 10 features that Australians desired according to the REBAA survey. It pays (literally) to play to your audience.
One major mistake that people make is designing their fixer-upper according to their personal tastes, and that's fine if you are renovating for yourself. Less so if you are trying to resell. Try to stay away from permanent furniture such as built-in televisions or bookcases. Buyers will likely want to bring their own furniture, so try to keep your interior design and structure as creatively demure as possible. This also applies to quirky paintjobs and wallpapers, or odd structural choices. Keep it average, and you'll appeal to more people.
Making sure you get the right loan is integral to maximising your profit, so ensure you get as much choice as possible by talking to us!