Turn Key versus Remodel

What Home is Best for You?

When you picture your ideal home, you probably imagine a nice open floor plan, updated kitchen and bathrooms and pristine finishes like 1040 Mandalay. But when you look at “affordable” beach homes you see shag rugs, dated decor, small rooms and choppy layouts. This is one of the big dilemmas that most home buyers face on Clearwater Beach. So, should you create a dream house by renovating a fixer-upper or pay the extra for a turnkey property in move-in condition? That is the question we will study in this blog.

Buying a Fixer-Upper

If you can get house on Clearwater Beach that doesn’t show well at a good price and if you understand what you’re getting yourself into. If you’re budget conscious, purchasing a house in need of TLC might be the best way to get a deal on Clearwater Beach and unlock value on a property. For instance, you might be able to find a bargain house a few streets over from where homes are selling for top dollar. Aside from price, these types of properties can have some other redeeming qualities. Older homes in particular may have unique details and character worth restoring. The question is always “what is it going to cost in time, money frustration?” We have had friends that were quite successful in renovating a beach bungalow. However, remodeling on Clearwater Beach has its challenges. SO, before you pull the trigger on a house that needs renovating, you’ll want to get real about the impact that buying the “Fixer Upper” home will have on you finances and your lifestyle.

Know the Building Rules on the Beach

Everyone, including us, underestimate the impact of the federal, state and local restrictions on remodel work. My Beach Construction Rule of Thumb is to expect at least:

  • Double to triple the amount of time a renovation would take anywhere else off the beach;
  • 50% higher costs than elsewhere;
  • Significantly more neighbor and city involvement.

Why you might ask? Because FEMA limits how much and what kind of improvement you can do to the property. The major issues is the 50% rule.

When is 50% NOT 50%

When you consider the value that you can spend to improve your home, FEMA and thus the City of Clearwater limit your improvement to no more than 50% of the value of your HOUSE within a year; not property. With the land is easily 75% to 90%. If you buy a $500,000 home on any beach including Clearwater, yourhouse value is as little as $50,000. So, you can improve it by $25,000 a year. This is even more complicated because you have to wait for the first project to finish before you can start the second project. So, if the first project takes 6 months, you may have to wait until the next year to start the second project.

Risks to Consider

Not all Remodels are the same.

A little cosmetics is easy. Even a face lift is doable. However, a bone reconstruction surgery is very risky. This is the best analogy that I can think of.

  • You can put on makeup. It is the same with a house. You can paint, put tile down, maybe update the cabinets, replace lights and switches. These are easy things to fix on a home;
  • A face lift is more expensive and takes time. Ditto for a home. Replacing the doors, sinks, bath tubs, and minor reconfiguring/repurposing a room are something some people can do, but it best left to the professionals;
  • However, moving a wall, upgrading the plumbing or electrical, redoing a roof or major repairs really do need good craftsmanship. Hiring a reputable contractor is hard and expensive.

Items you should think about include:

  • Roof Repairs
  • Structural work
  • Electrical upgrades
  • HVAC age and replacement
  • Plumbing upgrades

All of these are expensive and take time to resolve.

Financial Considerations

Appraising Value 1040 Mandalay avenue, Clearwater, Florida 33767
Adding up the costs

One of the obstacles with buying a house that needs a rehab is how to finance the work when you don’t have the cash on hand. It’s not impossible to pull off, but it certainly adds some complexity. It will require more time, patience and attention to detail to get approved for financing. You’ll also need to discuss lending products with your loan officer to see if you qualify. The most popular programs are 203(k) loans, which can be used for a wide variety of home improvement projects.

Turn Key

Move In Ready

Moving is hard enough and you may want to spare yourself the headaches associated with a fixer-upper by buying a turnkey property like 1040 Mandalay. Some people think at a turn key home is more expensive than a fixer upper. While the initial price is more, the total cost can be equal or lower than the final cost of a fixer upper. How is this possible?

If you can afford the potentially higher price tag of a turn key home, you do not need to risk of finding out there are hidden or unknown structural issues with the home. Make sure that building permits were pulled and the work passed inspection. If you are looking to reduce total risk and cost, Turn key could be the way to go.

It’s always nice to come home to a house where you’re not constantly thinking about all the improvement projects that need to be done before you can be happy with the living environment. On the financing front, a major advantage of opting for move-in ready condition is that there’s less red tape. These deals are more straightforward and can usually close faster and with fewer bumps, which is ideal for anyone relocating or with little time.

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