Last modified: 2020-03-10 | Approximate reading time 5 mins
In Quebec as well as most of Canada, real estate prices are rising. Taking on new construction projects has become too expensive for many households. Thus, many of those homeowners are turning to buying pre-constructed homes that require renovation. This solution requires a little more effort upfront but is often cheaper and allows for the dream of owning a new home to avoid turning into a nightmare.
In 2018, Montreal's residential real estate activity increased by more than 5% compared to 2017. Thus, the median price of a single-family dwelling stood at $492,000. In contrast, the median price of condominiums reached $325,000. (Source: Centris). These prices are indeed very high and push many families to try other solutions to become homeowners.
So, is it a good idea to buy a house that needs to be renovated? And how can you avoid a potential bad deal in the housing market? Luckily, our article will help to answer all these questions.
It should come as no surprise that this is the most common mistake made by new buyers. Before buying a property that will need to be renovated, it’s essential to research and investigate what to look for as well as specifics regarding the property itself. This should include taking the time to compare prices of similar residences in the same neighbourhood as well as calculating all the costs associated with the renovation and restoration of the dwelling. It’s obvious that the goal is to find a bargain home, as this will start your project on the right foot.
Even if you buy a house that doesn’t seem like it needs work done or a major overhaul, it is highly recommended that you consider using the services of an inspector. Thanks to their expert eye, they will be able to identify any existing problems. A house that has obvious signs of wear and tear and thus needs renovation will require a more thorough inspection because the work will be extremely important.
Among the components that should be inspected in depth: plumbing, roofing, the presence of asbestos, as well as mould in the walls. Use a professional who, in addition to the inspection, can give you a detailed report on the work that will need to be done. Afterwards, you can take this document to a contractor for a cost estimate.
In the case that you’ve decided to buy a property where you’ll settle with your family for the long term, you can never predict what the future holds. Therefore, don’t assume that you’ll necessarily stay your whole life in this house, with your children and grandchildren.
Nothing is forever, and so before you buy a property, you’ll need to consider the resale price. It’s not uncommon for homeowners to change their mind about their property or moving due to work or lifestyle changes. We’d recommend calculating the resale price for future years as well as the associated costs. If you then decide the home is worth buying, go for it! Another important point: keep the bills of installed materials and work done so that you can prove potential changes to future buyers.
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With such a large-scale project, you will be reminded quite often that changes are unexpected are commonplace. As with any renovation project, it is necessary to provide a budget in the case of an unexpected surprise. Therefore, it’s important to avoid setting aside an exact sum and instead understanding that you’ll need a flexible budget. Spend most of your budget on the important work first, and if necessary, leave space for an allotted amount that can go towards emergencies as well as mistakes.
If you’re buying a house that needs to be renovated, then this will likely require help from a team of professionals. These can include architects, contractors, plumbers, carpenters, electricians and so on. Large-scale projects require a team effort and a general contractor would be able to coordinate the work of each. Of course, it’s essential to choose serious and competent professionals.
Ask for references from friends and neighbours or former clients, consult any complaint files, check that the professionals you choose have the right permits as well as insurance. In the same way, you should get several quotes, evaluate and compare the services of different professionals to find the best value for your personal budget. As with most projects, investing in a house that needs renovations is a risk, but choosing good professionals will inevitably reduce the potential for something to go wrong.
Of course, if you have the skills to do the renovations yourself, our article "How to save money when renovating your home" on would interest you.
Do you intend to take on a mortgage in order to buy your future home? The good news is that it’s also possible for you to get a loan for financing your renovations. If going into your bank to take out a loan, make sure to ask about this option. However, the loans available won’t be the same at every bank and will have different offers. As an example, some banks offer a loan of up to 10% of the value of the house, against 20% for others.
In addition, some banks will impose conditions on your project and this can include setting limits and deadlines on the period of time to complete the work. Another important thing to mention is that not every project will be accepted. Of course, there are certain projects that are more likely to be financed than others, and these include:
You may also be required to provide quotes regarding renovation quotes. The latter will have to approve your renovation works in order to access the loan.
As we mentioned, buying and renovating a home is a project that needs to be rigourously organized. In the renovation trajectory, it’s important to prioritize jobs according to the needs and urgency to be able to install in the best conditions.
First, focus on the most important things including electrical, insulation, plumbing and roofing work. These jobs should be at the top of the list to make sure that your family is in a safe and comfortable place. Then come secondary jobs, those which help you to feel more at home. Before you start renovating, don’t hesitate to consult an architect or a technologist to evaluate the feasibility of your project. In the same way, compare banks to define which would benefit you the most to finance your renovation project.
RenoQuotes.com can help you get quotes for your home renovation project. If you submit your project to us, we’ll put you in contact with the most suitable contractors for you. Fill in the form on our homepage (only a few minutes), and you will receive quotes from trusted renovation companies.
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