Case study: I know somebody who purchased a house for $1.5 million. It’s a two bedroom house, has a narrow dark staircase and two very small bathrooms that can’t even fit a bathtub. The kitchen is small. Generally there isn’t much to like about the house. However, he and his wife redid the bathrooms and kitchen, made other changes including redoing the floors, repainting and decking the internal courtyard, probably spending in excess of $150,000. He got divorced, remarried and he and the new wife continued to live in the house. Now despite there being three bedroom houses with two big bathrooms across the road on sale for $1.2 million, and four bedroom, three bathroom houses a few doors away for $1.5 million they probably spent another $150,000 redoing the bathrooms and kitchen, increasing the size of the balcony, altering windows, adding cupboards, changing window coverings, etc. After all this expense they still have a house that has two bedrooms, two small bathrooms, a narrow dark staircase and which is probably worth less than $1.2 million! What a waste of money.
Now, as I’ve suggested there was an alternative to purchase a bigger house in the same neighbourhood. But, clever innovation and with a spend of $200,000 they could easily have added a third bedroom, which would have been a very generous master bedroom with a third bathroom (big enough for a proper bathtub and a shower) and a large balcony. Suddenly their $1.2 million house could have become a much nicer house to live in that would have been valued at over $1.4 million.
But really the problem with the house is it has ‘bad bones’. It’s poorly designed and has many features, including the staircase and bathrooms, which are very difficult to change. Spending any money on the house is really throwing good money after bad.
Ask these questions before embarking on a renovation
It’s important to assess whether the changes, renovations and remodelling your house will be money worth spending by asking these questions:
Want to learn more about renovating and building houses?
Paul Netscher has written 2 easy to read books 'An Introduction to Building and Renovating Houses - Volumes 1 and 2'. An Introduction to Building and Renovating Houses Volume 1 deals with Hiring Contractors, Managing Construction and Finishing Your Home. and Designing your ideal home Volume 2 deals with Finding Your Ideal Property and Designing Your Dream Home.
("Great for those that DIY. Very helpful in home renovations!" said a Reader on Amazon.com 5*****)
I’m a construction professional, author of several successful construction management books, and a home owner. I’ve made mistakes in construction management, I’ve seen others make mistakes, but importantly I’ve had multiple successful construction projects and I’ve learned from the mistakes. I want to share these lessons and my knowledge with you.
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and 'An Introduction to Building Houses - Volume 2 Finding Your Ideal Property and Designing Your Dream Home'
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