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MooseHead
01-01-2010, 02:19 PM
First off I'd like to say hi to everyone! Just came across this forum and it looks like there are a lot of people who are very knowledgeable. Hopefully some of you can help me out!

Well I'm looking to purchase my first home/rental property. The place I'm looking at right now is a vacant duplex. I hope to fix it up and rent it out once the renovations are complete. I am planning to do as much of the work as I can on my own with help from friends & family.

Basically, I was hoping someone could give me a ballpark estimate of what they think it would cost to completely renovate a duplex inside and out.

Listed at $24,900 (CAD)

General Description
**ATTENTION CONTRACTORS** LOCATED IN A QUIET AREA THIS GUTTED DUPLEX REQUIRES TOTAL RENOVATIONS TOP TO BOTTOM BUT HAS POTENTIAL OR COULD BE A BUILDING LOT. EXTREME CAUTION SHOULD BE USED WHEN ENTERING PREMISES, ESPECIALLY WHEN USING STAIRS LEADING TO THE BASEMENT AND UPSTAIRS UNIT. USE AT OWN RISK. PROPERTY BEING SOLD 'AS IS,WHERE IS'

I am not allowed to post pictures yet but I will once I have 15 posts.




Cheers,

MH

Kman
01-02-2010, 12:16 AM
If I were you I would hire a home inspector or contractor to come in and give you a list in writing of everything that would need to be fixed. You could very easily get yourself in a money pit.

You could post pictures and someone could tell you what they see in the picture, but what is not seen in the picture could be even worse.

pushkins
01-02-2010, 09:19 AM
First off I'd like to say hi to everyone! Just came across this forum and it looks like there are a lot of people who are very knowledgeable. Hopefully some of you can help me out!
MH


Welcome to the site.
Your question is kinda open ended and you didn't mention if the "total gut" was down to exposed studs or not, this small fact adds a huge chunk to remodeling costs with drywall and insulation if required, as well you mentioned nothing about existing plumbing and electrical if any.
I do a lot of remodeling work on properties advertised like yours and believe me there can be major differences in associated costs from one to another.
Windows add a huge chunk as well as roofing, both of these you didn't mention.
The local market will tell you what you need to know as it will dictate what you need to do to rent the property and therefor tell you what quality fitting and fixtures you will need.
My rule of thumb for this sort of property is simple, I look at what I can sell the property for (realistically) and work backwards from there.
For example lets take your listed property @ $24K , market price for a renovated house similar in same area assume $100K, your house needs windows and all internal work duplex so two bathrooms, two kitchens etc... assuming roof OK (for this example), also assuming moderate electrical and plumbing required my immediate thought would be I wouldn't want to put more than $40 - 45K into the project a good business plan is to always maintain equity in completed rental properties so 100K - 69K (24K+45K) gives 31K gross then allow 6% real estate commission on the 100K so your 31K gross looses another 6K net= 25K.
Even as your wanting it to be a rental this is a realistic approach to take, especially as a rental it is important to have good equity, what if your first tenant trashes the place (and doesn't pay rent) you evict them then have to spend more money on replacement/repair of the place, this just ate a big hole in your 25K equity.

Sorry for a long winded answer but your question is a very open question with no way to really answer it 100%
Hope this helped a little.

MooseHead
01-02-2010, 11:50 PM
Thank you both for your replies. Kman, I will deffinitely look into getting someone to come inspect before moving forward.

pushkins, thanks for the big reply, lots of good info. I understand what you said with regards to the open question but as of right now I don't know much myself. I will be going to see the house in person this week and get more info.

I'm also in contact with my township as I believe they will match whatever renovations I do to the house.