The home our investor clients invested in was improved with foundation work, new engineered wood flooring, a new kitchen and tile among others which amounted to about $50k. The property was projected to sell at about $100k above the original cost but brought in much more due to market dynamics. (Deduct from that remodel cost, taxes, transaction cost, holding cost);
To cut a long story short, I agree with the other agents: project cost depends on the property and varies. Throw in an allowance for unknown tangibles you should always expect. Remodeling is not for the faint of heart and after deducting all transaction cost, most people are better of putting their money into mutual fund where it grows at a consistent 8%+.
Good day to you. I applaud you in your desire and passion for the undertaking of a remodel project. It can be hugely rewarding or your worst nightmare. That will depend upon you- your resilience, your project scope, your construction knowledge, your temperament, your budget, your time frame, your requirements, your limitations, outside influence /control and more. DO YOUR RESEARCH. UNDERSTAND WHAT YOU ARE GETTING INTO. A remodel project is not for everyone. Most aspiring homeowners do not fully understand what is involved. One mantra to keep in mind throughout the process is â€œexpect the unexpectedâ€.
As to your questions, consider these key points in relation to cost:
1. The simplicity or complexity of the design itself. You have to first look at the structure. Are you going to change it? Are you going to add square footage and if so, how much? Adding square footage can be less costly or very expensive depending on the ad-on. A square box slab builds less expensive than a slab going in 6 different directions. A two story builds less expensive than a one story given equal sq. ftg. A pier-beam foundation is less cost than a concrete slab. Regardless, if you are going to change the design or add square footage, your cost will go up. Be sure and research any requirements in terms of permits or any architectural control/ restrictions by the HOA or city, etc. They may or will directly impact your cost. Cover your bases. Again, expect the unexpected. Whatever budget you determine, add 20% to it for the unexpected. Youâ€™ll spend it especially with older homes.
2. The simplicity or complexity of the finish out. Again a homebuyer who is building from the ground up or remodeling is only limited by their own budget and taste. In terms of features and options the sky is the limit in todayâ€™s building world. There are more products, options, materials and material alternatives than ever before. But the basics do not change. Wood is still more expensive than carpet generally speaking. Granite is more expensive than Formica- and so on. Appliances can be affordable or very expensive. Know what you want up front and plug that into your budget. DO NOT DECIDE TO CHOOSE AS YOU GO. That will cost you a lot of money.
3. The third is the builder or contractor themselves and more specifically the profit or margin they are willing to build the home for. That can vary greatly depending on the builderâ€™s size, reputation within their market, their abilities and resources, need for business or their current "pipeline" and their business "bottom line".
So a home bid can vary greatly based on the above mentioned factors. I can take a home plan and set of specifications and give it to 4 builders or contractors and get back 4 different prices. I see it all the time- one home, one set of specs and pricing ranging from $70 per sq. ft. to $150 per sq. ft. You REALLY have to be careful and thorough in the design/bid process. Now I say this carefully. Most of the build projects will run from $65- $100 per foot given the same specs and that excludes the lot cost and cost of the home purchase itself. I mean actual construction cost. The range could be $70 - $200 depending again on design and finish out and your taste.
If you have more questions or need more information, feel free to give me a call or send me an email. I love talking about construction and would be happy to discuss your specific project with you in more detail. Hope this helps.
Stephen B. McClain, Broker Owner
Cornerstone New Home Solutions
As far as your question regarding price per square foot, etc., that really depends on the finish out and what your budget is. I would be happy to discuss that with you and determine, depending on which house you decide on and what you have/want to spend, how much you should or should not invest.If you do not yet have a good Realtor to help you and guide through the process, feel free to contact me and I will do all I can to assist. I represent buyers like you at no cost, have a wealth of resources at my disposal, and can definitely get you where you want to be!
Joe Jarusinsky, Realtor/Master Instructor, Keller Williams Realty, Austin's #1 Real Estate Company, Call 512-261-4415
After reading your question, it seems as if you are looking to occupy for some time. Therefore, putting in the "sweat equity" can be well worth it.
I usually believe that magnitude of remodels for this area can be broken down(generally speaking) at $10, $20, and $30 per sq. ft. Anything greater than that would most likely be overdoing it.
As for contractors, the best thing to do is get bids from trusted sources. I can certainly help with your home search and make suggestions for your remodeling efforts.(with regard to best places to put money and the appropriate contractors)
Please feel free to contact me anytime.
Great observation, that area is increasing in value every year! Appreciation rates are steadily on the rise for remodeled homes. I'd love to forward you some statistics of the area, it's very exciting to see the neighborhood grow.
Ultima Real Estate partners with builders who have 20-30 years experience in the Austin market, remodeling; focusing on the high priority items that would increase your return on resale. Their keen eye has generated an increase in Return on Investment, Calculated by subtracting ; ($gain from investment - $Cost of Investment) divided by the cost of the investment. While that seems easy enough to calculate, many variables including repair and maintenance expenses and methods of figuring leverage which is the amount invested and the interest on that, which can affect ROI numbers. In that we also begin including taxes, insurance, carrying costs.
In remodel, you can spend anywhere from $25,000 - $100,000 depending on what resale market you're trying to achieve.
In January 2011 the average price per square foot was in the $100 range, now in August of 2013 we're seeing resale homes with potential in the $150s per square foot. A recent remodel went for $261 per square foot. With proper construction management you can invest wisely to incorporate the highest gain. Having experienced brokers and builders on your side is very important!
Are you planning on financing your investment? Those costs can be a crucial part of the equation. We partner with you to plan the best, most cost effective investment strategy for your goals.
REALTORÂ® GRI, CNE
Real Estate Consultant
Ultima Real Estate
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Each home has it's own amount of repair needed and size therefore a unique amount of money & time too. Getting a contractor to work with you if you are new to the game may be an issue. Everyone is so busy I can hardly get my regular contractors to do jobs for me and my clients.
I've seen what looked like easy/small remodel needs start at $30K. I recently sold a home that was in need of only cosmetics like only first flooring in living room & entry, paint, exterior paint & popcorn ceiling removed that pushed toward $15K. No kitchen, bathrooms or anything upstairs.
It's not for the faint of heart or those with shallow pockets. Best Wishes!
You have received some excellent answers from others, so hopefully this will be helpful as well. My partners and other investors I work with have bought and sold several homes in the Windsor Park & University Hills areas. My answer is based on the desire to achieve a top dollar, under 30-day sale post remodel.
Common issues in the area are foundation, lack of updating, & closed floor plans. These are all good things if you are looking to get properties at a price low enough to remodel. To remodel a home into fantastic condition in this area is going to cost roughly $30-45K. This may seem like a high amount, but if you buy the property at the right price it will allow for this. You will have to work closely with an agent who is good at finding these deals and pounce on this type of deal once it is available. Cash is king (your cash, Hard money, private money or HELOC) because of the ability to close quickly.
The good contractors question is tough. There are a ton of great ones and they are all pretty busy because of that reason. Some are not even taking on new clients. My advice is to network with people who are doing the quality of remodels that you are shooting for and ask who they use.
Hopefully this makes sense.