“Make your house a home”: How to renovate your home?!
Now if you are not a handyman or don’t know how to drive a nail into the wood, then don’t do anything yourself.
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If the house is big and it needs lots of TLC, then I will recommend getting a second opinion from another home inspector and it will give you more light as to what you are getting yourself into. Don’t get any renovations done from these home inspectors. They all have remodeling companies and they are not the cheapest or best workers. Again, the bottom line is to shop for it for one week and you should not have any problem finding the right people at a good rate when there is no boom going on. A lot of people who had jobs in the housing boom are now dying to do jobs at half the price.
Even if you buy a new house, you may not like the contractor grade carpets, tiles, or kitchen cabinets in the house. You will eventually change it in a few years. Include that in the price of a new home.
Now, if you are buying an older home, and it does have reasonable flooring, for example, it has nice carpets but you want to take them out and install laminate wood, then you are upgrading the place to your taste. If you are buying the place and you got a good deal but want to sell it in a few years for a profit then don’t spend money to make it to your taste because you may not be doing things which the new buyer will like, so he won’t have to upgrade it to his taste, or you won’t get a lot of money which you put into it to upgrade it.
Now, after you established what is needed in the house and you already got quotations from subcontractors, then you have a clear picture of what it will cost to buy the house. Generally, it will still end up as a good investment because you can put wood floors and granite countertops which new homes don’t have in that price range. You’ll say that if the homes which are in real good shape in that neighborhood are selling for $400,000 (in the better times, they were selling for $500,000) in you get these upgrades done yourself, this home should not cost you more than $340,000 on the upper side. Within a few years, when the market turns around, you will be able to sell this house for $500,000.
Now, if you have to put $6,000 down and bought the house for $290,000, which means you should be able to get financing at only 5.5%. The rest of the money which is needed to renovate the home can be borrowed against the home equity line of credit at a very low rate of interest if you don’t have it in your savings to invest.
Now, if you have decided to buy this house and are using contractors to finish your renovation, ask them to quote prices line by line of everything they are going to do. Get a separate price for flooring line-by-line items, cost of tiles or wood that you have selected, and cost of setting material, labor and guarantees. Don’t agree on one price for all the jobs. In case there is a dispute and you are not getting along well with the contractor, whether it your fault or his fault, then disputes can be solved if the things are written clearly.
Make it sure that everything is written in black and white. Don’t give any deposits upfront. Try to ask the general contractor what kind of profits he wants to charge on the job over and above his costs. Generally, contractors are happy to work with 10% to 15% of profits on top of their costs. You can also shop around for materials and buy them yourself, this way you can save on costs and buy better materials. This all depends on how much time you have and how much you want to involve yourself and if you want to save some money. If you want to make money from real estate business, I will highly recommend that you get involved with the renovation a little bit, as it will be a good experience for you.
If you are buying a house, try to see a lot of houses before you get into it. It will give you a lot of ideas how the homes are designed inside and outside. It will also help you in decorating and repairing your new house. There are a lot of open houses in the area on the weekends. Check your local newspaper because every day, they have a big real estate section. It will show you who has an open house in the area where you are looking. At open houses, you can talk to the agents about prices, as well as get a good look at the houses and compare prices. You can also tell these agents that are showing these houses what you are looking for. Always tell them you are looking for a real deal if not a steal. Again, remember, you have to steal it. That is how you are going to build your real estate empire.
Once you have decided where you are going to buy a house, focus on a small area. If it is close to your work and has good school, at least a 10-mile radius would do just fine. Now, make it sure that you are going to stick with your job, and that it will be around for at least the next 5 years. If within a year you intend to change jobs and work 30 miles from your present home or in a totally new city, then don’t buy a home in a rush. Sometimes you cannot sell the house within a year and make profits, because first time you buy the home, there are costs involved in the title insurance, stamp duties, mortgage fees, and real estate commissions. You cannot cover these costs and expect to make profits in the very first year.
Now, once you are sure that you are not going to be moving out in the next 3 years and the kids are going to good schools, and then set your focus within 10 miles of that area. If it is closer to the kids’ schools or you and your spouse’s jobs and other amenities like shopping centers, banks, groceries, the YMCA, and so on, then you will cut down on traveling time and gas money and maybe you can live with one car if you are not making a lot of money. When kids are growing, mothers are busy driving them around, taking them back and forth to school, or driving them to their extracurricular activities, so it is important that the house should be close to the kids’ school or your place of work. Now, if your spouse is working and you work quite far from each other, then it is better to find a home closer to where the wife is working, because most of the time, women have to take care of the home and kids, so the closer they are to their place of work, the better it is. They can also find a place halfway between the husband’s and wife’s work. But remember, if you have kids, schools are the most important thing. If you have to travel more to get to the good schools, then you have to find a house where the good school is.
BIG CITY AND DOWNTOWN AREAS
Now, if you are working in a big city downtown like Manhattan or Atlanta or San Francisco or Boston and you have a very good train system, it will be a good idea to buy a home in the suburbs, where they are much cheaper, safer, and cleaner. Suburbs do not have noises of trains, fire trucks, or ambulances. You can take a 30-minute ride on the train while you read the newspaper or a book until you get to your place of work. It is much faster and cheaper than driving in your car. Real estate prices in a lot of these suburbs are reasonable compared to living in the downtown area. I have seen a lot of these suburban prices go up by 20% to 30% a year.
WATCH WHERE JOBS ARE MOVING
When some big new companies, new schools, universities, hospitals, distribution centers, research centers, or factories open up in an area, then new resident developments also come into that area. Initially, these developments are sold at very reasonable prices because developers want people to move into their new developments, and eventually, these new developments can really increase in value. But most of the established old colonies where rich people are living will always keep on going up in value. For example, there is an old rich neighborhood in Winter Park in the Orlando area. People are buying houses which are only on 1/3 or ¼ of an acre. They are demolishing them and rebuilding new expensive homes which are going for over a million dollars.
WHAT KIND OF HOME YOU WANT
Before you decide what kind of house you want you need to look into some of these things. How much savings you have. Are you a professional or you having a good business. Your family net income after paying income taxes. Are you single or married? Is your spouse working or staying at home with the children? Do you have old parents or relatives which you need to take care of them and you have to live close to them. How many and how old are your kids? These factors will determine where you will be buying the house. Now, if your children are going to school then you have to find a home which is close to those good public schools where your child can get a good education. Home should not be too far from your place of work. Traveling is expensive on the car and gas. Traveling also takes away time from your family and work. It should also be close to amenities like Metro, shopping centers, a gym like YMCA, and the library. If the YMCA is close and libraries are close by, kids will love to go to these places after school. The YMCA is also a nice place where the whole family can swim or exercise together.
Now, if you are a single and very busy professional or executive, it might be better for you to buy a condominium close to your work, with your own pool, tennis court, gym security, computer room, business room, and so on. Mind it, condos have very high condo fees and do not appreciate as much as houses, but they are trouble-free properties if you are not an outdoor person and don’t have the habit of playing loud music or throwing parties.
By Ashok of http://becomerichinfiveyears.blogspot.com
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