Monday, September 11, 2006

Handy-man special can be a real bargain

If it's well done, you'll get all the money back
Apr. 20, 2006. 01:00 AM
PAUL IRISH
STAFF REPORTER

If you're looking for a house in an established area with some real character, don't buy the best one on the block, buy the worst.

It's advice many real estate agents give to first-time homebuyers who — unlike their counterparts in new subdivisions — don't want to wait 30 years for their trees to mature, but still can't afford to pay top dollar.

The theory is simple: Any renovations or refurbishing will more than pay for themselves as the worn and neglected home is brought up to the loftier neighbourhood standards.

A $250,000 fixer-upper could eventually fetch $400,000 in the right Toronto neighbourhood with the purchase of a new $40,000 kitchen, two new bathrooms totalling $30,000 and perhaps another $20,000 to paint the walls, refurbish the floors, install new windows, put on a new roof and make over the gardens.

It's a lot of money but you'll come out ahead with more coin in your pocket as the value of your newly refurbished home is pushed up by the market.

But it's not a slam dunk, as anybody who has undertaken renovations — big or small — will tell you. It's even more complicated when the owners have small children, as your home becomes a major construction area with debris, dust and tools.

Renovating isn't as easy as it's sometimes made out to be on the makeover TV shows. You might have the money, but do you have the time? If you have the time, do you have the expertise?

Dean Artenosi, a developer and president of Renosolutions, a division of the Arten Group of Companies (http://www.renosolutions.ca), says he deals with many first-time homeowners.
A lot of people try to do renovations themselves, he says, but it has a way of coming back and biting them. With time being the "new currency," he advises against it.

"I admire the ambition that many people have, but it's stressful just being in a home that's undergoing renovations, let alone doing the actual work. It can be a very trying time and we do our best to get it done and get out."

Chris Willerton, 33, and his wife recently purchased a home near Woodbine and Mortimer Aves. in Toronto and immediately put in a new main washroom.

"When we first saw the house, everything was there except a suitable washroom," he says. "Instead of continuing our search, we decided we could put in a new one."

Willerton says he's good at basic jobs around the house, but they decided to spend about $20,000 on a professional contractor.

"I know my limitations and we decided we wanted some real quality out of this," he says.
Willerton is confident he'll get the $20,000 back and more, when the house is sold.

Wise Advice for the 1st Time Buyer


Brampton realtor Kim Campbell offers this advice to ease the steep learning curve for first-time homebuyers:


· Find a knowledgeable realtor who will explain everything, including the offer process, buyer agreement, the dual-agent system, multiple offers and lawyers' fees.
· Ask family and friends for an agent referral.
· It's important to have a good rapport with an agent.
· Be honest and upfront with the agent about what you want, so you don't waste time pursuing the wrong properties.
· Couples: Make sure you are in agreement and hunting for the same dream house.
· Be aware location is the No. 1 priority when buying, if you are thinking of your first house as an investment.
· Client loyalty is important, if you expect the agent to work hard for you.
· Arrange a pre-approved mortgage and organize house insurance.
· Take a long-term mortgage and lock into today's low interest rates.
· Understand the importance of a house inspection by an independent expert.
· Look at how the neighbours keep their houses; if they're dirty and rundown, that will never change.
· Do your homework. Attend open houses and look at MLS listings online so you will have some sense of the local real estate scene.

Donna Jean Mackinnon from Toronto Star