They say you can smell a good deal when you walk into a house, literally - and it smells bad! The best deals are almost always marketed or presented poorly, and have owners who really don't care or have other things on their mind. The ideal candidate reads like "First time on market in 50 years ..." or will mention property developer and opportunity in the same sentence.
With extremely rundown properties, most first-home buyers are put off by the sheer magnitude of the problem. However, in reality, most of the work is superficial. As I see it, the challenge is to set some money aside when you purchase, find good tradespeople, renovate quickly to minimise disruption or downtime, and convince the bank that the property is a good buy. Banks will typically lend only 80 per cent on extremely run-down properties or where there are compliance issues. Therefore first-home buyers need first, a 20 per cent deposit, and second, to set aside a renovation budget.
A full makeover will cost from $60,000 to $70,000. This entails stripping a property right back to its framing and starting again. It includes rewiring, insulation, re-gibbing, new kitchen and bathroom, new flooring, new fittings, and painting inside and outside. Rewiring, insulation and therefore relining are becoming far more important and almost essential with any project.
You can start to see why the bank gets a bit nervous, but it's also a lot of money to try to put aside.