Finding money for your renovation project can be tough. Unless Grandma is handing you money you may be stuck looking for ways to fund your renovation project. In the GTA (Greater Toronto Area) flipping houses can be a good investment but it has to be done right without breaking your budget.
Here are some ways to help you get the money you need to get you started on your project.If you aren’t doing all the renos youself and will be hiring a contractor,ask the contractor if he/she is willing to be a partner in your venture. You can offer them a slice of the investment in exchange for their work. If they are interested in this investment you can be assured they will do their best work on the house.
First and foremost as I’ve said in earlier posts – make sure you come up with a very realistic budget. One that involves the unexpected expenses that come up with every project. You don’t want any surprises that will cost you and extra $5000 – $10,000
Do your homework!! Know what’s going on in the market in the area where the house is located. If there are lots of older homes that have not been taken care of it may not be worth it for you to put top dollar into your house/investment. You know that old saying “Location, Location, Location!” Well, this is a time to be absolutely sure that the money you put in will also get you a return.
Know where to spend your money – there’s pretty cosmetic fixes and there’s necessary fixes – Know the difference!
Contact a Realtor – they know the market better than any one else.
If you aren’t doing all the renos youself and will be hiring a contractor,ask the contractor if he/she is willing to be a partner in your venture. You can offer them a slice of the investment in exchange for their work. If they are interested in this investment you can be assured they will do their best work on the house.
If you decide to use a partner make sure you have each other’s roles and responsibilities in writing to avoid blurred lines and hurt relationships. Creating some kind of contract give each person a very clear understanding of what is expected of them and also what they will get in the end.
Now to get to the Money Part:
Talk to your bank or mortgage broker. There are options for you to get money to use towards an investment, however there are lots of restrictions. Borrowing on a line of credit may be one way of doing it if you can convince the lender that the return will be a good one.
In Canada we hear a lot about the Smith Manoeuvre – something you can check out. We also hear a lot about the Manulife One mortgage option – talk to your lender or Financial Advisor about how this works. Another way is to borrow from your RRSP’s or if you have a property with a lot of equity in it then you can get a second mortgage on it to finance your new investment. These are just a few of the creative solutions you can talk to your lender or Financial Advisor about. If you have the desire to get this project done then your passion will lead you to the right people.
If you have questions about the Real Estate Market or Renovations in the Burlington, Oakville or surrounding areas, contact me today. Jennifer Birch 905-633-4607