Buying an old house cheaply, fixing it up and turning it into your dream home is a fantasy for many people. In reality, old houses often come with a multitude of problems, especially those that are neglected. It isn't uncommon to find that many old fixtures need replacement, especially those installed a few decades ago. Electrical wiring, water pipes, the sewage system and insulation are some of the things that often need to be completely re-done to comply with current building standards.
Things You'll Need
- Funds for repairs
- Contact information for inspector
- Contact information for contractors
- Lawyer (optional)
Arrange a whole-home inspection, preferably before you bid on the property. That way, you can decide not to buy it if the renovation costs are going to be too high. Have the building inspected by an electrician, a plumber and a builder, who will check for all the standard problems as well as for foundation faults, damp and mold, deteriorated roof and chimney, termite and other pest infestations.
Determine your budget. Whether you have cash at your disposal or are planning to apply for finance, you will need to calculate the total funds you have available to spend on the project. If the property is a foreclosure or has a market value higher than the asking price, you may be able to get a mortgage that covers the repairs.
Get quotes for the repairs that you need to do. Request written estimates from at least three contractors for every aspect of the work, and ask for references that you can contact before appointing them. If you are planning to manage the project yourself, price the materials you need to buy and secure reliable, bonded laborers to do the work.
Prioritize the repairs that you need to do first. Home renovation projects frequently end up costing more than planned, due to the discovery of additional problems during the process. Plan to do the project in stages, and make sure you have the funds to cover each stage.
Appoint the contractors for the first stage of repairs. Draw up an agreement that stipulates a payment schedule based on the delivery of milestones. Have the agreement compiled or checked by a lawyer if possible, and don't advance the contractors any money unless it is in accordance with the schedule.
Keep the building materials in a locked area during the project to prevent pilfering. Oversee the work personally on a daily basis to keep up to date with any problems that arise. If you are employing laborers, be clear about the terms and conditions of their employment and put these in writing.
Move into the house as soon as you can, even if the renovations are not fully completed. If necessary, renovate a section for your use before tackling the rest of the project. This way you can do the repairs at a pace that suits your lifestyle and your budget.
Live in the house and enjoy the character of the home. Keep a close eye on any known trouble spots, and be prepared to spend money doing unexpected repairs.
- Home Buyer's Information Center: Home Inspections
- Bankrate.com; Fixing Up an Historic Home; P. Curry; July 2003
- Mortgage Loan; 203(k) Mortgage Covers Both Purchase and Repairs; K. Johnson
- U.S. Department of Housing and Urban Development: Fixing Up Your Home and How to Finance It
- Free Legal Documents: How to Manage Your General Contractor
- Photo Credit Photos.com/Photos.com/Getty Images
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