OK so you’ve spent good money on that home inspector and their inspection report. You know what to expect from the house. You discussed the report’s findings with the seller and they have agreed to reduce the price accordingly, so as not to loose the deal in today’s buyer’s market. You feel that the report was ‘money well spent’ and now have moved into the property and are working on making the house your home.
But what about all the report’s recommendations? Are you going to be conciensous and fix all those issues, or just ignore them until some time into the future? Your uncle, cousin, best friend, new neighbour all have opinions as to what to do about the recommendations in the report. Now you are confused and likely to procrastinate and do nothing. Ah… the headaches of the new home owner.
In this post we discuss how to proceed with any necessary repairs or imporvements.
What is your expectation for the property?
This first step is critical. Decide which of the following categories best suite this house. This requires that you know what you want to do with the house. Your options menu are the following.
Place on life support, 1 to 2 years.
Renovate for mid-term, 5 years.
Renovate for comfortable future, 10 years plus.
Allow for demolition in your final purchase price. This will have to include an allowance for hazardous material removal by a certified contractor, in advance of the demolition. Then you have a blank canvas to work with and a new construction budget. The new house site development requirements will be substantially different from the original building. It will be essential to partner with an experienced designer or architect to ensure your new plans comply with current regulations; otherwise, you will enter the murky world of requesting deviations from zoning regulations with the municipality… a process for an experienced negotiator representing you to the planning department.
Place on Life Support
Be sure to keep the utilities ON, including power, gas and water, allbeit set to minimum levels. A house deteriorates quickly if left only to fend for itself the exterior weather conditions. Be sure to have a security system functional to prevent break-ins and squatters. Ask a friend, neighbour to check on the house periodically, at least once a week… or do it yourself.
Renovate for Mid-term
This option is for buyers knowing full well that the house is only going to serve them for say 5 years. Spend no more than 15% to 20% of the assessed value for the house, as you are not likely to get that money back… ever. Remember that with annual assessments, the house depreciates while the lot appreciates in value.
Renovate for Comfortable Future
The bones are essentially good for the building. The location is great. The layout, although dated, is certainly pleasing. Then you have found a home for the long term. Engage a architect, designer and general contractor to do what you want with the house. The sky or you budget is the limiting factor in the renovation. Be sure to take advantage of a multitude of government programs that offer rebates and subsidies for making an older home more energy efficient.