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Deciding whether to renovate an existing home or tear it down and start fresh is a big decision for anyone in the real estate investment game. I talked to Dana Forbes, a renowned high-end home flipper with a proven track record of identifying and transforming hidden-gem properties into lucrative investments, to get her advice on how to make this choice. She’s here to share her wisdom on real estate, the costs, and some considerations in deciding for your next step. With Dana’s help, I’ll explore the pros and cons of both options, helping you understand the best approach to take for your next project.
For the readers who are new to real estate, can you explain the benefit of rebuilding over renovating and vice-versa?
DF: When you’re deciding whether to rebuild or renovate in real estate, think about the shape the home is in, its location, and what’s going on in the market. If the building’s really old or not safe, then tearing it down and starting fresh might be your best bet. Sure, you get a brand-new look, but it’ll cost more and take longer. On the flip side, renovating means fixing up what’s already there. It’s often cheaper and faster, and you get to keep the original charm of the place, though sometimes you might find problems you didn’t expect. As an expert in real estate flipping, I always look at a property’s potential, not just what’s on the surface. It’s all about doing your homework and planning things out for a successful investment.
Is it easier to rebuild or renovate?
DF: When you’re torn between rebuilding and renovating, think about what shape the place is in, where it’s at, and what you want to achieve. Rebuilding means starting from scratch, great for really old or shaky buildings, and you get to make it super modern. But yeah, it can hit your wallet hard and take a bunch of time. Renovating’s more about sprucing up what’s already there. It’s often cheaper, keeps the place’s original vibe, but sometimes you run into unexpected problems. From my experience in real estate, really think about what each property could be and what the market’s after. Don’t just jump into rebuilding because someone says it’s better. It all boils down to doing your homework on the market, figuring out what you could make back on your investment, and what you’re really looking for in a property.
What are the considerations that go into deciding between the two options?
DF: When flipping high-value properties, like those on the Gold Coast, here’s a quick rundown on whether to rebuild or renovate:
1. Check the condition: If the place is solid but just looks dated, a renovation could do wonders. But if it’s falling apart, consider rebuilding.
2. What’s hot in the market?: Stay in tune with what buyers are digging. Not into open-concept anymore? Wanting energy-efficient homes? Your decision to rebuild or renovate should vibe with these trends.
3. Budget smart: Renovations can seem cheaper but watch out for hidden costs. Rebuilding might be pricier upfront but can pay off. Think about all the costs, from buying to selling.
4. Time and effort: Rebuilding usually takes longer. If you’re short on time or resources, renovating might be easier. But if you can afford the time and investment, rebuilding could give you more bang for your buck.
5. Your skills matter: If you’re new to this, renovating might feel less daunting than a total rebuild.
6. Legal stuff: Check out the local building laws. They can really influence your decision.
7. Every house is unique: Consider the location, history, and style. A historic house might just need a thoughtful touch-up, while a less remarkable one might benefit from a complete do-over.
In short, choosing between renovating and rebuilding is all about balancing the house’s needs, market trends, your budget and skills, legal rules, and what’s special about each property.
When you see a home for the first time are there specific things that tell you right away that it’s a rebuild or a renovation? What are those things?
DF: When I first look at a home, I consider a few key things to decide if it’s better for a rebuild or renovation:
1. Structural check: If the house has major structural problems or feels outdated, it might need a rebuild. But if the bones are good, a renovation could do the trick.
2. Layout and space: Look at how the rooms flow and if the space is used well. A bad layout might need a rebuild, but if there’s potential to tweak and improve, renovating is the way.
3. Potential value: Think about how much value a rebuild or renovation could add. If a rebuild can really up the property’s value, it might be worth it.
4. Character and style: For homes with unique style or historical charm, keeping the original vibe with a renovation often makes more sense.
5. Cost vs. benefit: It’s all about what you get for what you spend. If renovations can achieve your goals without breaking the bank, they’re often preferable.
6. Rules and regs: Check out local building laws too, as these can limit what you can do and sway the rebuild vs. renovate decision.
In short, always look at the home’s structure, layout, potential value, style, cost, and local laws to decide if a rebuild or renovation is the best path forward.
How much does it cost to demo a home?
DF: It’s important to remember that demo costs can really vary. Factors like the size of the house, how complex the building is, whether there are any hazardous materials to remove, local labor prices, and the cost of getting rid of all the rubble can all affect the price. When you’re flipping houses, especially thinking about knocking one down to rebuild, it’s super important to get these numbers right as part of your overall budget. I can’t stress enough the need to be on point with your financial planning in real estate, and demo costs are definitely a big part of that equation.
How much money can someone save by renovating over rebuilding?
DF: Renovating can often be a more wallet-friendly choice than a full rebuild. If you choose go the renovation route, consider the following factors:
1. Keeping what’s there: Renovating usually means you’re working with the existing structure. This can save a bunch because you’re not starting from scratch.
2. Selective updates: Instead of redoing everything, you might just spruce up a few key areas. This targeted approach can be way cheaper than a total overhaul.
3. Less labour, less cost: Renovations typically need less work than rebuilding the whole house, so you’re likely to spend less on labour.
4. Easier on permits: Getting permissions for renovations can be simpler and cheaper compared to the hoops you might have to jump through for a new build.
While the exact amount saved depends on the project, there can be significant savings with renovations, especially if you’re smart about where and how you invest in the property.
What are your top three renovation tips for readers?
DF: 1. When in doubt, take it out: Don’t be afraid to take something away, a wall, a window the odd nook, 9 times out of 10 if it doesn’t quite look right, it’s better to get rid of it.
2. Look up: If a house has low ceilings, it’s nearly impossible to change, I usually steer clear of those houses.
3. Plan ahead: Your renovation will go much smoother if you have as much as possible planned, picked out, and ordered BEFORE you start your demo.
What are your top three rebuild tips for readers?
DF: For successful property rebuilding, the best strategy is to combine smart planning, a solid understanding of the market, and seeking advice when necessary. My top three rebuild tips are:
1. Know your market: Really dig into the local real estate scene. Don’t just look at what houses are listed for; see what they’re actually selling for. This helps you understand what buyers want and what’s trending in your area.
2. Plan for the unexpected: Always be a bit cautious with your budget. If the market takes a dip, you want to be sure you’ve planned with the lower end of sale prices in mind. It’s all about not getting caught off guard.
3. Don’t rush, get advice: Take your time to find the right property and don’t hesitate to ask for expert opinions. Chatting with a seasoned real estate agent or a local expert can give you a real edge, helping you understand both the current worth and the potential of a property before you dive in.
Lastly, what words of wisdom can you leave the readers with who are looking right now to invest in a home?
DF: My best advice boils down to doing your homework, being financially cautious, and leaning on expert advice in the world of real estate investing.
1. Do your homework: Really dive into the market. Look at actual sale prices, not just listing prices. This gives you a realistic view of what’s happening in the market.
2. Plan for the ‘what ifs’: Always plan for potential market fluctuations. Base your financial expectations on conservative estimates to ensure you’re covered if things don’t go as planned.
3. Don’t rush, ask around: Don’t rush your investment. Take the time to find the right property. Consulting with experienced real estate professionals can provide invaluable insights into a property’s value and potential.
4. Remember, It’s about the location: Choose a property not just for its current appeal, but for its location and potential. A great location often holds its value better.
5. Be financially meticulous: Be thorough with your financial planning. Consider all related expenses, including fees, taxes, and the cost of any improvements. This helps avoid any surprises down the line.
How can readers get in touch with you?
- Phone: 917-620-3971
- Email: dana.forbes@compass.com
- Website: compass.com/agents/dana-forbes
