{"id":713,"date":"2020-11-08T16:52:31","date_gmt":"2020-11-08T21:52:31","guid":{"rendered":"https:\/\/diywithchristine.com\/?p=713"},"modified":"2024-02-26T15:08:57","modified_gmt":"2024-02-26T20:08:57","slug":"how-to-remodel-old-house-on-a-budget","status":"publish","type":"post","link":"https:\/\/diywithchristine.com\/how-to-remodel-old-house-on-a-budget\/","title":{"rendered":"How To Remodel An Old House On A Budget To Make Money"},"content":{"rendered":"\n

Remodel An Old House On A Budget & Create Thousands Of Dollars In Equity<\/strong><\/h2>\n\n\n\n

Last year, my husband, Adam, and I were on the hunt for our very first home.<\/p>\n\n\n\n

We were the typical newlyweds that lived in a duplex (apartment) for the first year of marriage. It didn’t take long before we were ready to live somewhere where you couldn\u2019t overhear the neighbors living next door.<\/p>\n\n\n\n

So off on a house hunt, we went! First, we found a realtor we trusted and shared with her the things we were looking for in a home. Then shortly after that, the fun began. <\/p>\n\n\n\n

New listings were sent directly to my email, and we went and visited the ones that caught our attention. Little did we know that we were looking for a diamond in the rough\u2026 it took us over half a year of searching to find the one.<\/p>\n\n\n\n

Why did it take us that long, you ask? Well, it\u2019s because we were determined to buy an old house that we could remodel and create thousands of dollars in sweat equity. Yes, I know, we gave our realtor a tall order, but she came through!<\/p>\n\n\n\n

We are now proud owners of a 1560 square foot 1950s ranch with two acres of land. After we bought it, we spent the next year remodeling. We bought it for $108,000, spent $66,000 in repairs, and are expecting to be able to sell it close to $200,000 in a few years when we are ready to move on. <\/p>\n\n\n\n

(Update: <\/strong>The house officially appraised for $195,000!!! Our official out-of-pocket repair expenses were $52,000, and we bought it for $108,000. That means we created $35,000 worth of equity!! It’s so exciting to see your hard work pay off!)<\/p>\n\n\n\n

Note<\/strong><\/h5>\n\n\n\n

(The estimated new value is based on a comparison of other homes in our neighborhood with similar acreage, square footage, and amenities. We do not guarantee that you will get the same results as we have if you decide to remodel your house.)<\/em><\/p>\n\n\n\n

During this entire process, we learned so much about remodeling an old house on a budget. I want to share exactly what we learned so you can create thousands of dollars in equity in your old house as well!<\/p>\n\n\n\n

Let\u2019s dive on in!<\/p>\n\n\n

\n
\"remodel
The kitchen is one of my most favorite transformations of this house! (We still have to add the backsplash. Then the kitchen will be done!)<\/figcaption><\/figure><\/div>\n\n\n

UPDATE:<\/strong> We added the subway tile backsplash, and I AM IN LOVE with our kitchen!! The best part is we installed a counter-to-ceiling subway tile backsplash in a couple of days for LESS THAN $150!<\/a> Talk about remodeling an old house on a budget!<\/em> Check it out now!<\/p>\n\n\n\n

<\/p>\n\n\n\n

How To Remodel An Old House On A Budget & Create Thousands Of Dollars In Equity<\/strong><\/h2>\n\n\n\n
    \n
  1. Find an old property in a good neighborhood (or use your current home!)<\/a>\n
      \n
    1. FAQ\u2019s\n
        \n
      1. Is it better to renovate or move?<\/a><\/li>\n\n\n\n
      2. What brings down property value?<\/a><\/li>\n<\/ol>\n<\/li>\n<\/ol>\n<\/li>\n\n\n\n
      3. Plan your renovations<\/a>\n
          \n
        1. FAQ\u2019s\n
            \n
          1. What renovations will increase home value the most?<\/a><\/li>\n<\/ol>\n<\/li>\n<\/ol>\n<\/li>\n\n\n\n
          2. Make a mock-up budget with real supplies<\/a>\n
              \n
            1. FAQ\u2019s\n
                \n
              1. How much does it cost to remodel an old house?<\/a><\/li>\n\n\n\n
              2. How do you finance a major home renovation?<\/a><\/li>\n<\/ol>\n<\/li>\n<\/ol>\n<\/li>\n\n\n\n
              3. Start with the interior work<\/a>\n
                  \n
                1. FAQ\u2019s\n
                    \n
                  1. In what order should I remodel my house?<\/a><\/li>\n<\/ol>\n<\/li>\n<\/ol>\n<\/li>\n\n\n\n
                  2. Work on the curb appeal<\/a>\n
                      \n
                    1. FAQ\u2019s\n
                        \n
                      1. How can I make my home look more expensive outside?<\/a><\/li>\n<\/ol>\n<\/li>\n<\/ol>\n<\/li>\n\n\n\n
                      2. Stop when you have reached your budget<\/a><\/li>\n\n\n\n
                      3. Decorate like a minimalist<\/a><\/li>\n\n\n\n
                      4. Take care of your property until you sell<\/a><\/li>\n<\/ol>\n\n\n\n

                        <\/p>\n\n\n\n

                        Step One: Find An Old Property In A Good Neighborhood (Or Remodel Your Current Home!)<\/strong><\/h2>\n\n\n\n

                        The first step to remodel an old house on a budget is to find an old house at a good price. If the house is purchased too high, then you will price yourself out of the neighborhood. That’s a guaranteed way to never recoup all of your money.<\/p>\n\n\n\n

                        <\/p>\n\n\n\n

                        Task One: Decide Whether You Are Going To Renovate Or Move<\/strong><\/h3>\n\n\n\n

                        You might be wondering – is it better to renovate or move? The answer lies in the comparisons, your personal needs, and your willingness to put some sweat equity in the home<\/p>\n\n\n\n

                        <\/p>\n\n\n\n

                        Your Needs<\/strong><\/h4>\n\n\n\n

                        Let\u2019s start with your needs. Do you currently own a home? Because you\u2019ll need to own one to be able to remodel it. If you don\u2019t then it would be better to move. However, if you do, then does your current home fit your family (and your future family) comfortably?<\/p>\n\n\n\n

                        It would be better to move if you need more space because (most likely), the cost to add to a house will be too great compared to moving.<\/p>\n\n\n\n

                        (Again, I say most likely because every situation is different, and you must run the numbers on your own home. However, in general, the cost to build new is more costly than remodeling an existing home.)<\/p>\n\n\n\n

                        On the other hand, if your family is no longer growing (or won\u2019t be for at least five years), and your home fits your needs, then it might be better to renovate. The reason behind this is because it is costly to move. Think about the random costs; moving trucks, random “necessity” purchases, closing costs, etc.<\/p>\n\n\n\n

                        Also, you will still likely want to paint and \u201cfreshen up\u201d a few things at your new house to make it better suit your style.<\/p>\n\n\n\n

                        <\/p>\n\n\n\n

                        Your Willingness To DIY<\/strong><\/h4>\n\n\n\n

                        Moving on, let\u2019s talk about your willingness to DIY. Do you have any experience with major home renovations? If you do, then you\u2019re a prime candidate for a home renovation! If you don\u2019t, then that doesn\u2019t necessarily mean it\u2019s better to move.<\/p>\n\n\n\n

                        You might need to find an older home that only needs basic cosmetic work. That includes painting, possibly installing new flooring, and refinishing the cabinets that are already there.<\/p>\n\n\n\n

                        Furthermore, do you enjoy working with your hands and building things? If you don\u2019t then you definitely should not be looking into renovating your home. (Unless you\u2019re willing to pay contractors to do it which is also fine if the numbers work out.)<\/p>\n\n\n\n

                        A house renovation is hard, dirty<\/em> work. It\u2019s not for the faint of heart. If you\u2019re living in the house while you work, then your life will be thrown into chaos until all projects are complete. It\u2019s hard for a lot of people to handle and is not for everyone. So maybe moving would be better for you.<\/p>\n\n\n\n

                        On the other hand, if you enjoy building and creating and don\u2019t mind hard work every day, then renovating your home could be a great option for you!<\/p>\n\n\n\n

                        <\/p>\n\n\n\n

                        The Comparisons<\/strong><\/h4>\n\n\n\n

                        Lastly, we have to look at the comparisons. The comparisons (\u201ccomps\u201d for short) are all the homes in your neighborhood that have similar features to yours that have sold in the last six months to a year.<\/p>\n\n\n\n

                        You are looking for homes with the same (or as close as possible) number of bedrooms and bathrooms, square footage, acreage, and amenities as your current home. Also, you are looking for the ones that have recently been remodeled.<\/p>\n\n\n\n

                        If the homes you find are selling for $20,000+ more than your home, then it might be worth renovating your current home instead of moving. This means that you have room to \u201ccreate equity\u201d into your own home.<\/p>\n\n\n\n

                        That\u2019s like printing money!<\/p>\n\n\n\n

                        The next tasks are assuming you are searching for another house to move to. If you are renovating your current home, then skip to the next step<\/a>.<\/p>\n\n\n\n

                        <\/p>\n\n\n\n

                        Task Two: Choose Three Neighborhoods With Mid- to Upper-Range Priced Homes & You Want To Live In<\/strong><\/h3>\n\n\n\n

                        You probably are aware of the neighborhoods around you that are nicer and the ones that aren\u2019t as nice. If you aren\u2019t then do some research on the internet and drive around the neighborhoods to get a better feel of them.<\/p>\n\n\n\n

                        Consider the home prices, crime rate, school rating, walkability score (if that is important to you), and annual property taxes.<\/p>\n\n\n\n

                        Once you choose your three, start your house hunt.<\/p>\n\n\n\n

                        <\/p>\n\n\n\n

                        Task Three: Find The \u201cWorst\u201d Property In The \u201cBest\u201d Neighborhood<\/strong><\/h3>\n\n\n\n

                        After you\u2019ve decided which neighborhoods you are going to target, contact a local realtor and have them sign you up for instant alerts from the MLS for all houses that fit your criteria.<\/p>\n\n\n\n

                        When you get an email, scan the house for the following features.<\/p>\n\n\n\n

                        <\/p>\n\n\n\n

                        Features<\/strong><\/h4>\n\n\n\n
                        Feature<\/th>Description<\/th>Why We Care About This For A Remodel<\/th><\/tr><\/thead>
                        Home Price \/ Square Foot<\/td>Calculate the price per square foot of the home. Take the asking price divided by the square footage of the house.
                        For example, a 1500 square foot home on the market for $150,000 has a price per square foot of $100.00.<\/td>                        		This price will let you know whether you\u2019re getting a good deal for the neighborhood, or whether you\u2019re paying on the higher end.

                        You can now compare all houses to determine which sale price is a better deal regardless of the square footage and actual sale price.<\/td><\/tr>
                        Year Built<\/td>Anything built in the 1900s is preferable.<\/td>Older homes usually need some work done to them, so you can purchase them for cheaper, fix them up, and sell them at a higher price. 

                        Also, drywall became popular in the 1950s, so if you want to stay away from plaster walls, I recommend searching for 1950-1970 homes.<\/td><\/tr>
                        # Of Beds & Baths<\/td>3+ bedrooms and 1.5+ bathrooms are preferable.<\/td>In order to sell high, you need a large market, and a home that can suit both singles and families will always sell for more.<\/td><\/tr>
                        Crime Rate<\/td>Find the crime rate on Trulia.com. The lower the better.<\/td>Think about your own preference. If crime is rampant in a neighborhood, you probably wouldn\u2019t want to live there either. Well, neither will future buyers. 

                        Plus, you run the risk of having your property damaged while you\u2019re living in it & selling it.<\/td><\/tr>
                        School Rating<\/td>Find the school rating. A school rating of 5 or higher is preferable.<\/td>Whether you have (or plan to have) kids or not, future buyers most likely will. A decent school system nearby will help you sell for top dollar later.<\/td><\/tr>
                        Annual Property Taxes<\/td>Find the annual property taxes. The lower the better.<\/td>Property taxes and insurance are two expenses that never go away, even if you pay off your house completely.

                        Minimizing this expense can save you thousands of dollars over the years you are living there.

                        Check around because often, neighboring counties can have vastly different property taxes.<\/td><\/tr>
                        Other Features That Matter To You (Walkability Score, Stores Nearby, Highway Proximity, etc.)<\/td>Look for other features that are preferable for you.<\/td>You are going to be living in this home for at least 2 years, so you might as well enjoy it while you are there.

                        Also, if you find it valuable then others will find it valuable as well.<\/td><\/tr><\/tbody><\/table>
                        Property Features To Look For<\/figcaption><\/figure>\n\n\n\n

                        <\/p>\n\n\n\n

                        Time To Compare<\/strong><\/h4>\n\n\n\n

                        Finally, compare these features to the comps from recently sold homes in your neighborhood that have been remodeled (like we talked about above). This way, you can get a good understanding of what it will take to get top dollar out of this particular home.<\/p>\n\n\n\n

                        To sum it up, think of the features that you<\/em> would want in a home because chances are, so does everyone else. What\u2019s stopping everyone else from purchasing a home like this is the work that needs to go into it to get it up to its full value. <\/p>\n\n\n\n

                        That\u2019s where you come into play, my beautiful DIYer!<\/p>\n\n\n\n

                        <\/p>\n\n\n\n

                        Task Four: View The Homes That Match Your Criteria & Find The \u201cCosmetic Remodels\u201d<\/strong><\/h3>\n\n\n\n

                        Next, you want to actually visit the homes that match your criteria. You want to visit as many homes as you possibly can to get the best idea of what\u2019s available in your desired neighborhoods.<\/p>\n\n\n\n

                        To create the most equity in the house without needing expensive contractors or $50,000+, find the property in the good neighborhood that needs work, but the bones are good.<\/p>\n\n\n\n

                        Look for the one with wallpaper on every wall, red or yellow oak cabinets in the kitchen, pink tile in the bathroom, carpet everywhere, and a yard that needs major landscaping help.<\/p>\n\n\n\n

                        All of those are cosmetic changes. The bones of the house (the roof, water heater, furnace, well pump, water softener, foundation, etc.) should be good for another 10+ years. (If they aren\u2019t then that\u2019s something you will have to factor in your budget to replace before you can sell again.)<\/p>\n\n\n\n

                        Also, try to avoid homes that need walls knocked down or moved because drywall and wall reconstruction is an expensive remodel that requires a little bit of technical experience.<\/p>\n\n\n\n

                        (Yes, I am totally speaking from experience because our 1950\u2019s ranch was wall-to-wall wood paneling AND we knocked out five walls (two of them being loadbearing). The drywall & wall reconstruction cost $10,000 and we did half the work while a drywall contractor did the other half.)<\/p>\n\n\n\n

                        <\/p>\n\n\n\n

                        Task Five: Avoid Features That Will Bring Down Your Property Value<\/strong><\/h3>\n\n\n\n

                        The last thing you want to be aware of before you purchase a home are the potential features that will hold down your property value.<\/p>\n\n\n\n

                        <\/p>\n\n\n\n

                        Bad DIY\u2019s From Previous Owners<\/strong><\/h4>\n\n\n\n

                        Be weary of things that looks like the builder took short cuts. Even if the work is \u201cnew\u201d, nobody will pay top dollar for work that hasn\u2019t been completely properly.<\/p>\n\n\n\n

                        (This is also a note to you to not do anything you can\u2019t complete (or have someone show you how to complete) at a professional level! Many things such as painting, adding floating floors<\/a>, adding backsplash in the kitchen<\/a>, and updating bathroom hardware are definitely in a new DIYer\u2019s wheelhouse.\u00a0<\/p>\n\n\n\n

                        But other things like removing walls, tiling floors, building decks, adding new plumbing, or adding new electrical might be out of your wheelhouse at the moment. That\u2019s okay! Take that into consideration when you\u2019re choosing the next old house you are going to remodel on a budget.)<\/p>\n\n\n\n

                        <\/p>\n\n\n\n

                        Noisy Roads Or Other Unpleasantries Nearby<\/strong><\/h4>\n\n\n\n

                        Things such as noisy roads, sex offenders in the area, hospitals, dumps, or businesses next door, or neighbors that don\u2019t take care of their own property are all things that will hurt your property value even if it is the prettiest property in neighborhood.<\/p>\n\n\n\n

                        Avoid these features if possible when searching for your next old house to remodel on a budget.<\/p>\n\n\n\n

                        Side note: if you are going to renovate your own property, check out this article from HomeLight.com<\/a> that goes into much further depth on things that can bring down your property value.<\/p>\n\n\n\n

                        <\/p>\n\n\n\n

                        Our Real Life Example<\/strong><\/h3>\n\n\n\n

                        First off, I have to clarify that we viewed our home as an investment opportunity, and if you\u2019re looking to create thousands of dollars in equity, you should too. That means we were looking for very specific home characteristics, a purchase price that made sense, a location that would suit our needs for the next five years, AND have a great resale value.<\/p>\n\n\n\n

                        We were looking for a house that:<\/p>\n\n\n\n