BUYING A FIXER-UPPER OR A TEAR-DOWN
There are a number of mature neighbourhoods in the Greater Vancouver Area that currently have quite an inventory of homes that are either being rebuilt or are being extensively renovated. So what are the advantages of buying a fixer-upper and what are the advantages of buying a tear-down?
One of the great things about buying a fixer-upper is that every time is the right time; it is not dependent upon whether the real estate market is hot or cold. Real estate properties that need some tender loving care can be a real bargain during any real estate climate. The best fixer upper is the home that everybody will covet when it is fixed up, but few can see past its imperfections to see the potential.
Location, location, location.
Location drives saleability. Buying a fixer-upper or a tear-down can be a wonderful opportunity to acquire property in a neighbourhood that is expensive. For some, it is the only way. Fixer-uppers are usually on terrific lots that are big, wide, private, or otherwise scenic. So usually, the selling feature of the property is the location and the lot itself. Those details, obviously, can’t be changed. The home’s interior and exterior can.
Buying a fixer-upper or a tear-down is a great way to obtain a custom-made home. Whether you are the designer and builder, or whether you hire an architect and a general contractor, a fixer-upper is a wonderful way to create your dream home. Depending on how much work needs to be done, these homes open a world of opportunity to choose your flooring, your kitchen, your bathrooms, and much more. For that reason, fixer-uppers can provide much pride and satisfaction.
In some cases, a buyer may just be interested in the land on which a house sits, but he/she may not want the house itself. In others, the house may be condemned and has to come down anyway. If you find yourself interested in a tear-down, you need to know that there are several special considerations that need to be made. Buying a tear-down is a lot different than buying a traditional property. Look below to pick up a few tips that I’ve learned through the years.
Can You Get a Residential Loan for a Tear-Down?
To have the smoothest experience possible, you’re going to want to get a residential loan for the property that you’d like to buy. However, that’s not always possible with a tear-down. If the house itself is condemned, the land is considered to be unimproved. No house is technically on the property, so a residential loan is out of the question. That’s a problem because your other financing options are likely to require higher down payments and will probably have higher interest rates as well.
Leave at Least Part of the Structure Intact
If the house that you’d like to tear down isn’t condemned, you should be able to get a residential loan. However, you might not want to tear it down completely. If you do, you will have to deal with getting new permits, and the process can be extremely complex and confusing. One way to get around it is by leaving at least a few walls standing. In that case, you will technically be rebuilding the house. The permits shouldn’t be as difficult. If the foundation is still in good shape, you can save time and money by using it for your new house too.
Build the New House Before Tearing Down the Old One
Another possible way to simplify the process is by building your new house before tearing the old one down. This will eliminate issues regarding financing, but it could prove to be impossible. Is there enough room to build another house on the same land? If you want the new house to be on the site of the old one, that will be an issue too.
Get in touch with Vancouver’s top realtors to discuss the best opportunities for you in this market. We are never too busy to find the right strategy for you.