« Home Improvement Analysis, Restoration or Modernization/Renovation? | Main | Property Buying for Home Renovation continued »
Property Buying for Home Renovation
By arlene | December 5, 2008
The second quarter of the twentieth century brought a new lifestyle to western city dwellers. The motor car, no longer a luxury or a rich man’s toy, was not only here to stay but also created the need for freeways, highways and networks of roads which shortened distances and enabled the affluent and middle classes to leave the confines of the inner cities for the more pleasant surroundings of the suburbs.
Town planners based their projections on the philosophy that the rich moved uptown, leaving for the poor the older, cheaper dwelling units downtown which were closer to the work place and accessible to public transport. But poverty usually meant overcrowding, buildings often were not properly maintained either by landlords or by their less affluent occupiers, and slums developed.
In many cities there was suddenly a vital need for urban renewal but the cost of recycling old buildings was so enormous that the relatively more economic cost of building from the ground up caused both local authorities and owners to simply demolish and rebuild. Throughout the world, slum clearance wiped out many of the most delightful city residential areas and replaced them with ugly high- rise blocks; the old tenements became modern versions of the same thing — without the charm.
However, one glimmer of hope emerged from the destruction — what was known in the sixties as ‘Chelsea-style’ self help urban renewal. Would-be home owners, unable to afford houses uptown, or simply not interested in becoming part of suburbia, scoured the tumble-down terraces and rows of cottages close to the cities, looking for bargains. The derelict old properties could be had for a song. The quaint old streets lived again as houses were renovated, modernized and restored.
Spiralling fuel costs added to the attraction of being closer to town and old houses in these areas, especially those still bearing some of the beauty and elegance of the Victorian and post Victorian eras, have become so fashionable as to be almost unobtainable at a reasonable price. During the property boom for instance, a renovated two bedroomed terraced cottage on less than 200 square metres in one of Cape Town’s more popular ‘Chelsea’ areas like the Gardens or Green Point would have set you back between $40 000 and $50 000, while a three-bedroomed, two bath- roomed average family home on 500 to 700 square metres would have cost the same in some suburbs — or even less, depending on the class and popularity of the area and the distance from town.
The renovation revolution has just about wiped out the possibility of finding bargains, but a few do exist. And an initial bargain is essential if the costly business of restoration is not to end up in hopeless over-capitalization. On the other hand, there can be a tremendous amount of satisfaction in doing a really good renovation, and it does give the owner an opportunity to build in the kind of character and atmosphere that would be impossible to achieve in a new home.
Once you have made up your mind to renovate rather than build or buy a renovated property, make a study of the market in various areas. Find out from agents and property supplements in newspapers how much restored houses are being sold for and how much you can expect to pay for a dilapidated one. It is difficult to provide an accurate formula here because material and labour costs rise constantly, but a rough estimate can be obtained from current ground-up building costs.
If a total renovation is necessary — new roof, plumbing, wiring, plastering, replacing or repairing of floors and ceilings, painting and redecorating, you can expect a professional contractor to charge you for his labour about 30 to 50 percent more per square metre than he would to build you a new house in the first place. Material will cost you the same per square metre either route, less what can be saved from the old building. But don’t be fooled by material costs alone. To replace a single wooden sash window could cost up to ten times as much as a modern casement for a new house.
Once you have estimated the cost of the renovation, add the purchase price and what you believe would be a reasonable profit should you want or have to sell the property. If you end up with a figure somewhere in the region of the selling prices of similar houses in the same area, you have probably found a reasonable buy.
Possibly related posts: (automatically generated)
Property Buying for Home Renovation
- Selling Homebuilding Contracts
- Why should a seller give a sole authority?
- The best way of Marketing and Selling Property
- The Facts about estate agent
- What an Real Estate Agent can help?
- Interesting decisions
- How to get paid
- For what period of time should a sole authority contract extend?
- Working with a Buyer's Agent
- How to choose Real Estate Agent when Private Property Buying is a bad idea
Topics: Agent, Contract, Market, Property, Residential | 5 Comments »
December 20th, 2008 at 10:34 am
You’ ll find houses, town houses, and vacation homes, view commercial properties, learn about real estate values of Kentucky homes, and even look at foreclosure listings. … Real Estate
December 20th, 2008 at 11:21 am
If the property is sectional title, this will need to be obtained from either the Body Corporate or Managing Agent. … Property Sales
July 11th, 2009 at 5:40 pm
If a potential buyer is interested in your property they can contact any real estate agent and provide the MLS number listed on your … … Fewer Listed
August 19th, 2009 at 4:00 am
Winning Web site, you can access helpful links, specific laws, step through the process of how to buy a foreclosure &mash; cost guarantee. … Foreclosure Com Webinars
September 22nd, 2009 at 10:59 pm
The Council of Mortgage Lenders also claims that an increasing influx of immigrants and students to the UK has driven demand for… … British Company Based