DH's gran is moving to an aged care facility and wants to sell her house. The house itself is over 60 years old and is in pretty bad shape. There is termite damage to the floorboards, the roof needs replacing, there is water leakage into the downstairs garage and basement, kitchen needs to be totally redone, and the whole thing needs repainting.
The house is situated in a pretty upmarket area and is close to some good schools. The block is quite big and the land alone is worth quite a bit. And despite the state of the house, it has lots of potential - upstairs, there is scope to add in another bedroom and bathroom, as well as a study. Downstairs could be built in to house a self-contained flat (minus the kitchen) of sorts with a bedroom, bathroom and living area.
This would take the home from a three-bedroom, one-bathroom dwelling to a five-bedroom plus study, three bathroom dwelling with two separate living areas.
DH's uncle intends to list the property at $400,000. We would put in a maximum offer of $350,000, given that this is what RPData values the land at. In its current form, the house is essentially worthless.
Nicely renovated, four-bedroom, two-bathroom houses in this area usually go for around $550,000-$650,000. We would live in the house and raise our family in it, so selling it is not a priority, but we would obviously be careful to not over-capitalise.
Would you take on this project? Do the potential pros outweigh the obvious con that is renovating a house in a state of disrepair? Could we basically rebuild the house for $150-$200k? Keep in mind that we have never renovated before and would be relying on trades to do the bulk of the work.
This post has been edited by jamdonut: 01/02/2013, 09:12 PM