Article by Donald Plunkett
Austin Remodeling – Other
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One of the many wonderful aspects of the Austin, Texas real estate market is the variance you will find amongst properties found within the city of Austin. While many large national tract home builders have entered Central Texas, the actual city of Austin still maintains its wide array of choice and design for home buyers. Throughout the city, especially in such areas as Tarrytown, Cat Mountain, Westlake, Hyde Park, and others, remodeling, and even complete tear downs have become increasingly popular. As a buyer or seller considering such a project in today’s marketplace, you must be careful to avoid certain pitfalls.
Unlike what you may have seen on television shows which glorify and oversimplify the process, remodeling a home with the intent of profiting in the near future takes careful planning and discipline. The most important decision you will make is picking a property in which you can not only add value, but also one in which there will be demand for when the time comes to sell. Help differentiate your investment by looking for certain features that are both unique and highly desirable for your particular market. A great example in Austin is a property with a view of Lake Austin or the hill country. School districts can help differentiate your property as well. Affordable remodeled homes in the Eanes school district historically have a very low days on market.
Getting a number of bids from licensed contractors and selecting contractors that you trust is extremely important. Ask for references and for examples of past work. Since time is money, find out how long it is truly going to take to finish the remodel. Do not take everything said at face value until you can validate it. Since many times financing is involved, you will need to understand the process of draws and the lender’s inspectors that will validate certain work is completed before releasing funds. While this may seem burdensome, it may allow you to sleep better knowing that certain things are being completed to a lender’s satisfaction. It is important to understand the budget and to be aware of where cost overrides could potentially occur and what you will do if there is one. Having some type of buffer in place is much more advantageous than being tapped out to the last penny.
Before moving forward with a remodel, be certain you know the true market value of the property in its current untouched condition. Unfortunately, making a strong investment decision isn’t as simple as weighing your predicted future value versus your original cost of investment plus remodel cost. You must also look at such factors as realistic carrying cost of the debt, taxes, construction time, in addition to factors affecting possible future market conditions, such as current market supply versus demand, trends for the future, etc. Simply remodeling doesn’t guarantee profits. Make smart decisions and consider all of your risk prior to moving forward with any remodel. Remodeling for the sake of remodeling is a risk you don’t need in today’s market.
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