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Would you do it?

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#1 jamdonut

Posted 01 February 2013 - 09:09 PM

DH's gran is moving to an aged care facility and wants to sell her house. The house itself is over 60 years old and is in pretty bad shape. There is termite damage to the floorboards, the roof needs replacing, there is water leakage into the downstairs garage and basement, kitchen needs to be totally redone, and the whole thing needs repainting.

The house is situated in a pretty upmarket area and is close to some good schools. The block is quite big and the land alone is worth quite a bit. And despite the state of the house, it has lots of potential - upstairs, there is scope to add in another bedroom and bathroom, as well as a study. Downstairs could be built in to house a self-contained flat (minus the kitchen) of sorts with a bedroom, bathroom and living area.

This would take the home from a three-bedroom, one-bathroom dwelling to a five-bedroom plus study, three bathroom dwelling with two separate living areas.

DH's uncle intends to list the property at $400,000. We would put in a maximum offer of $350,000, given that this is what RPData values the land at. In its current form, the house is essentially worthless.

Nicely renovated, four-bedroom, two-bathroom houses in this area usually go for around $550,000-$650,000. We would live in the house and raise our family in it, so selling it is not a priority, but we would obviously be careful to not over-capitalise.

Would you take on this project? Do the potential pros outweigh the obvious con that is renovating a house in a state of disrepair? Could we basically rebuild the house for $150-$200k? Keep in mind that we have never renovated before and would be relying on trades to do the bulk of the work.

Edited by jamdonut, 01 February 2013 - 09:12 PM.

#2 EsmeLennox

Posted 01 February 2013 - 09:14 PM

I would certainly seriously consider it. I would think about the major jobs that need doing and are some calls to get 'ball park' figures of the cost and go from there.

#3 jenchristo

Posted 01 February 2013 - 09:18 PM

I don't think you could do it for that much. Why don't you get a building inspection &/or some quotes for the renovation/extension.

#4 The Awesome One

Posted 01 February 2013 - 09:20 PM

I guess it depends, where would you all live while these renovations were taking place? Can you realistically afford it?

If you wanted to do it I would get a professional to go through the house, look at everything that needs to be done, get an estimate and see if it lines up with what you are happy to put into the project.

#5 solongsuckers

Posted 01 February 2013 - 09:20 PM

Yes I would consider it but I would do some serious investigation as to how much everything would cost first.

#6 *cough*

Posted 01 February 2013 - 09:21 PM

QUOTE (jenchristo @ 01/02/2013, 07:18 PM) <{POST_SNAPBACK}>
I don't think you could do it for that much. Why don't you get a building inspection &/or some quotes for the renovation/extension.


Also factor in potential family politics.

#7 ekbaby

Posted 01 February 2013 - 09:27 PM

If it wasn't your nana's house would you consider it?

#8 NotBitzerMaloney

Posted 01 February 2013 - 09:28 PM

You might do it and end up with a lovely house for a good price that was worth the risk...
But the potential for family issues would put me off it.
I can imagine hearing about how you underpaid for grandmas house at Christmas in 20 years time. For me personally that would make it a no.

#9 Ice Queen

Posted 01 February 2013 - 09:31 PM

QUOTE (ekbaby @ 01/02/2013, 07:27 PM) <{POST_SNAPBACK}>
If it wasn't your nana's house would you consider it?


Get a building inspection and go from there.

#10 jamdonut

Posted 01 February 2013 - 09:33 PM

My parents have a small rental they would be willing to let us rent for cheap for a few months while we carry out the major works.

Yes, we would definitely get a building inspection and obtain quotes but before going to that expense/effort I would like to get some opinions.

Family politics isn't really an issue. DH's mum and uncle just want to sell it quickly. DH's uncle knows we are interested and is fine with us putting in a lower offer if we decide to. DH's nan would be thrilled to bits if she found out we wanted to buy it and keep the home in the family.

Edited by jamdonut, 01 February 2013 - 09:35 PM.

#11 42n8

Posted 01 February 2013 - 09:38 PM

Doesnt stack up as a good investment to me.

350k to buy + stamp duty etc. Plus a multi-storey reno inc adding bathrooms and a kitchen. Termites. Water damage, roof replacement? You're not gonna get that done for <200k (to keep the finished property within market value) by out-sourcing the majority of the work.  And  then there's the hidden problems that always occur on older home reno's.

Even if you do pull all the work you've speculated to be done in under that sort of budget, you're not going to achieve top market value for a budget-priced renovation so you wont gain any equity by doing it.  All you'll get is headaches and stress. I wouldnt do it - especially if I needed to live there whilst it's being done.

Forget the sentimental attachment to the property, it sounds like a money pit.  

However, long term, if you survive all the renovations and end up with your dream family home - then go for it.  Even if you do over capitalise now, what does it matter in 20 years time?

#12 Avogadro

Posted 01 February 2013 - 09:39 PM

I think you're vastly underestimated how much the reno will cost.  My sister did a reno on her house - building in underneath her house (didn't require lifting) - it was a $300k job.  Nothing fancy at all - and no kitchen.

#13 jamdonut

Posted 01 February 2013 - 09:44 PM

QUOTE (Avogadro @ 01/02/2013, 09:39 PM) <{POST_SNAPBACK}>
I think you're vastly underestimated how much the reno will cost.  My sister did a reno on her house - building in underneath her house (didn't require lifting) - it was a $300k job.  Nothing fancy at all - and no kitchen.

blink.gif Yikes.

#14 WaitForIt

Posted 01 February 2013 - 09:51 PM

You couldn't do it for that little.

By the sound of it you'd be better off knocking it down, its considerably cheaper to build from scratch than renovate.

#15 Therese

Posted 02 February 2013 - 08:55 AM

The thought of the family issues that may arise from offering below what they wanted for the house would be enough for me to say I wouldn't do it.

#16 YodaTheWrinkledOne

Posted 02 February 2013 - 09:50 AM

QUOTE (jenchristo @ 01/02/2013, 09:18 PM) <{POST_SNAPBACK}>
Why don't you get a building inspection &/or some quotes for the renovation/extension.

Start off with this and go from there.  Also get some quotes for knocking it down and building new (may be cheaper)

QUOTE (ekbaby @ 01/02/2013, 09:27 PM) <{POST_SNAPBACK}>
If it wasn't your nana's house would you consider it?

And really think of this.  Is it in the area you had been considering anyway?  Is it the amount you had been planning to spend anyway??

And if it is substantially cheaper to rebuild something new, how will family feel if you knock down Nana's house??

#17 Guest_Sunnycat_*

Posted 02 February 2013 - 09:56 AM

To demolish and rebuild would probably be cheaper than to renovate with the extent of renovations you'd need to do.

#18 little lion

Posted 02 February 2013 - 12:25 PM

QUOTE (Sunnycat @ 02/02/2013, 09:56 AM) <{POST_SNAPBACK}>
To demolish and rebuild would probably be cheaper than to renovate with the extent of renovations you'd need to do.

This could be true. Just check out whether council would allow you to do this. Some old character homes have a lot of requirements surrounding their development.

#19 elizabethany

Posted 02 February 2013 - 12:45 PM

I would run just because of the termites.  They can cause a lot of structual damage that is exxy to fix.  I think it will be a money sink, cause family tensions, and make your lives a whole bunch more stressful.

#20 bluedragon

Posted 02 February 2013 - 12:47 PM

My first thought was it sounds like a money pit and it would be better to demolish and rebuild. Depends if you'd want to do that and if the family would have issues with that as well.

#21 2bundles

Posted 02 February 2013 - 12:51 PM

Rpdata is not a true indication of the land value. It is generally about 20% lower than market.

I agree with others about the $ to do the works. I would have said $300+.

Is there anyone else from the family interested?  If there is, then you would need to talk to them first.

#22 red_squirrel

Posted 02 February 2013 - 01:02 PM

Whilst it is probably an ideal house to knockdown and rebuild. I can't imagine this would go down too well with extended family. All those memories you are destroying yadda yadda.

You would also have to buy at the asking price or noses will be extremely out of joint.

Don't touch it.

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