A Comprehensive Guide: What to Consider When Buying a Fixer-Upper Home

The secondary housing market has been very active in recent months, with used apartments being more affordable than new developments, and many homebuyers are deciding to purchase living space at a lower price per square meter and invest in renovating it. Karl Piirits, construction expert at housing developer Bonava, provides an overview of renovation costs and highlights observations that should be taken into account when planning the purchase of a used apartment and its renovation, so that the process does not bring unexpected surprises.

The price of renovation depends on the apartment's original condition. In the case of major overhaul, where old walls must be demolished, wiring and plumbing replaced, walls, ceilings and floors straightened and finished, the scale of renovation costs is 600-750 euros per square meter, according to Piirits. "The biggest expenses include, for example, redoing a bathroom, which means spending 3,000-5,000 euros. For a typical 40-square-meter two-bedroom apartment, a major renovation would cost 24,000-30,000 euros," describes the expert who has experience renovating multiple apartments.

If you limit yourself to just refreshing, the price per square meter is of course lower. Repainting walls and ceilings, replacing floor coverings and installing a new kitchen comes to around 200-300 euros per square meter according to the specialist's experience, or 8,000-12,000 euros for a two-bedroom apartment. "If you have the skills to do renovation work in your home yourself and don't need to hire contractors, it's possible to achieve 35-50% savings by doing it yourself, depending on how smart you are in choosing materials and building ideas," notes Karl Piirits.

According to the expert, the biggest challenge in renovation is planning. "Often people want to create a completely different layout in the bathroom, but changing the location of the toilet and shower is more complicated than initially thought. You need to find out which walls can be demolished and how to route the water and sewage pipes," describes Piirits. In addition, the condition of the bathroom riser affects all plans. "If there's no way to change it, I would seriously consider whether to buy such an apartment at all."

When replanning an apartment, it must also be legalized. You need to find out whether the desired changes are permitted at all, whether a building project needs to be drawn up and a building permit or building notice obtained from the local government. "If an apartment is not legalized after renovation, selling it in the future can be more difficult," Piirits warned.

Another major challenge is electrical systems. In older apartment buildings, the electrical capacity is limited, so you need to plan ahead which household appliances can be installed in such an apartment. "Very few can do electrical work independently, and according to law it's actually not allowed, because lack of expertise can pose a risk to both people and the building. Electrician work rates have risen to 40-50 euros per hour, which is a line item to be calculated in the renovation budget," explains Piirits.

When undertaking renovation work, people often also underestimate the time required, because there is a lack of experience in assessing the scope of work, and the process often brings its share of surprises that cannot be foreseen when planning the budget and schedule. "I've seen several projects where renovation was started with the idea that it would be done in two months. By the fifth month, however, you're stuck, and looking for a master to take over the half-finished renovation work. But builders are reluctant to take over projects started by someone else," describes Bonava's construction expert.

Answering the question of how to assess whether renovating an old apartment makes sense at all, Piirits replies: "The budget is the measure of reasonableness. To the renovation costs mentioned above, you also add furnishing costs, and if you have little experience in doing construction work yourself, it can all turn out to be time-consuming and stressful. If renovation costs are expected to be in the same order of magnitude as the down payment for a new development, the stress associated with the work itself could be the deciding factor as to whether the initially lower purchase price of the apartment is worth it."

In addition, you must accept that when creating a quality home in an older building, there may be a limit beyond which things cannot get better. "Ventilation solutions present a major challenge because, for example, in panel apartment buildings, the only option is to install an exhaust fan in the bathroom riser opening and place fresh air valves on the windows for the rest of the apartment. It's not possible to do it more modernly, because there's no space for a separate unit and no ducts for building ventilation," describes Piirits. He also points out a common mistake where when building a new kitchen, a range hood pipe is put in the same shaft as the bathroom ventilator, resulting in conflicts with neighbors whose bathrooms start to smell of cooking.

When undertaking all work, it is also important to make sure the apartment is insured and the insurance provider has been informed about the work being done. "Unfortunately, it's a common situation where an accident happens when doing renovation work in an apartment yourself, for example, damaging a water pipe or radiator, which also damages a neighboring apartment. If the work has not been coordinated with insurance, no related costs will be compensated," Piirits gives an example from real situations that have occurred.

When comparing the renovation of an old apartment with the purchase of a new development, according to the construction expert, you should look at the whole picture of what living conditions you can get and what financial and time commitment all of this requires. "You can modernize an apartment in an older building, but you cannot change the indoor climate of the apartment, the stairwell and elevator behind the apartment door, the modernity of the surrounding courtyard of the building, or inconvenient parking solutions."

In Piirits's opinion, there is no single answer to whether to choose an old apartment or a new one. "The question is how much time, money and nerves the buyer is willing to invest. Renovation can produce very good results, but it also requires considerable effort and dedication. New construction offers fewer surprises and several years of developer warranty. In addition, a new apartment holds its value better over time, as it is more energy-efficient and has a guaranteed parking space. However, a higher quality living environment requires a larger initial financial outlay," summarizes Bonava's construction expert Karl Piirits.