Is that house a no-no from the get-go? Renovation Costs for ‘Bargain’ Homes

Posted by Brad Porteus on 13 February 2014


Buying a cheap house to renovate and turn into your dream family home or turn over for a profit can be a good investment. However, you need to know how to view a building to be sure the cost of renovation won’t be more than the saving you’re making on the ‘bargain’ price of the house.

The house may seem to be easily fixable at first glance, but it’s always advisable to contract a pre-purchase building inspection before finalising the sale. However, you can’t carry out a pre-purchase inspection on every house you view, so here we outline some warning signs to look out for at the house-hunting stage to tell you if the cost of renovation is going to be prohibitive. 

Bad drainage

Renovation cost: High

Bad drainage can cause water damage because rain water or drainage from the house stays in one place and doesn’t drain away, allowing it to seep into the home through cracks or even through doors if the level is high enough. It can also damage the foundations of the house, causing it to sink and damaging the structure. Without a professional, the only way to test this is to see if there are any puddles that stand for days on the property after a rain storm.

There are three categories of water to look out for, each worse than the last:

  • Clear water, which is usually just fresh rain water, indicating the drains at the end of the down pipes are blocked, stopping rain water from draining away quick enough.
  • Grey water, which contains some contaminants. The longer water is left to sit it will turn more grey. This suggests the drainage issue is very backed up.
  • Black water, which is grossly unsanitary and often contains waste or sewage. This could indicate there is a leaking sewer pipe below the home and will require extensive repair work by a professional plumber.

Sagging ceiling

Renovation cost: High

If the ceiling is sagging or falling, it is a safety hazard and the repair work cannot be postponed. If the ceiling falls in it would cause irreparable damage to the home, not to mention your family’s safety. It will not be safe to enter the home until this costly issue has been repaired. 

Water stains

Renovation cost: Moderate to high

Water damage is one of the most serious things that can happen to a home. It can be caused by flooding, leaking pipes, taps and toilets or from rain, finding its way indoors into the walls and ceiling.

Look out for brown stains on the ceiling and walls around sinks and showers, but also look at the ceilings and walls in rooms adjacent to these amenities, as extensive water damage can cause the stains to leak through the plaster. That’s when you know the cost of repair may really outweigh the saving on the buying price.


Renovation cost: Moderate to high

Water will not only weaken the structural integrity of the building, it will allow mould and other pathogens to grow freely to contaminate the indoor air. This contamination is especially dangerous for children, pets and people with respiratory problems including asthma, and will need to be repaired ASAP.

Cracked walls and floors

Renovation cost: Moderate to high

This is a sign that the structural integrity of the foundations of the home have been compromised, but at the same time it’s a difficult one to diagnose without professional help. Since Perth homes are built on sand, slow movement in the foundations is a common occurrence. Therefore, thin crack lines in the paint are to be expected and may not be worrisome, but  larger cracks, separating tiles in the floor and off-kilter doorways are sure signs that there is major structural damage. 

Rotting wood

Renovation cost: Moderate to high

Water damage and termite infestation can cause the wood in door frames and window frames to corrode. While house-hunting, gently pull and squeeze the wood in windows and door frames, and if it gives way or crumbles easily then it’s highly likely these will need to be repaired. Not only will you need to replace the wooden elements of the home, but you will also need to have the home sprayed for termites.


Renovation cost: Moderate to high

As well as keeping an eye out for pests, also examine hidden areas in cupboards and crevices to see if there is any tell-tale excrement that is a sure sign there is a pest infestation.

While you may believe the cost of pest removal is low, spraying the pests you can see or leaving out store bought traps is really only a temporarily solution to the problem. While you have killed those in your sight the others have rushed to the queen in the nest for protection and will shortly find another route into the home. Only a professional Licensed pest controller will have the proper chemicals and techniques to full remove an infestation in an environmentally friendly and safe way.

Sagging roof

Renovation cost: Moderate

Some houses are designed so that structural sagging is not immediately evident. A ceiling that dips and sags is pretty obvious, but a sagging roof line may not be. This type of sagging indicates that the roof frame is failing. Although not as costly as repairing a dipping ceiling, it will be a big and fairly expensive problem to fix and will need to be done before anyone can safely live in the house.

Don’t be fooled by the low cost of real estate. There will always be a reason a house or building is selling below the market value. The seller may realise the huge amount of repair that will be required to make the building usable.
With a little care on your part, looking out for the signs mentioned here you can eliminate some buildings just by looking in the right places. 

However, if you feel that you have found a home that you want to buy, make sure to come to us – the trusted professionals at BSP – the carry out a full pre-purchase building inspection to ensure you haven’t missed any hidden issues or costs associated with the home.