Buying a house is a major life change, and you'll have to make many decisions. For instance, do you want new construction, or does a fixer-upper appeal to you?
Fixer-upper homes have a great deal to recommend them, but also they can be a lot of work. Typically, a fixer-upper can be lived in but it needs lots of reconstruction or redesign. Because it needs work, these houses usually feature a lower asking price. This means that the buyer may be able to get more house for their money.
Before jumping into a fixer-upper, you'll have to weigh several considerations. Will the house be your primary residence? Will you be flipping it or renting it? How much will the market value of the home be once it's been renovated? How much money and time will be required to finish the project? Answering these questions and others will help you to determine whether or not a fixer-upper is right for you.
How to Identify a Fixer-Upper
In general, a fixer-upper needs fairly extensive renovations. This is more than just painting a couple of rooms, adding a deck or replacing the bathroom fixtures, although all of these tasks may be included in the project.
Instead, a true fixer-upper may have problems such as needing:
-All new windows
-A replacement roof
-New HVAC or central air
-Steps, sidewalks or a driveway
-A new plumbing system
-Extensive electrical wiring
-A complete remodel of the kitchen and baths
Typically, for a home to be a fixer-upper, these projects need to be completed with some urgency, and there may be a number of smaller jobs that also need to be done.
Is Fixing Up this Home Really Worth the Cost?
Some fixer-uppers end up being money pits that cost far more to fix than they will ever actually be worth. While it's difficult to assess precisely how much the renovations will cost, there are certain things you can do to obtain an estimate.
First, consider how old the house is. The older it is, the bigger the problems are likely to be. Those problems will be expensive to fix. Any home that's older than 50 is bound to be more of a gamble.
It's wise to ask a home inspector to thoroughly review the property for signs of frayed wiring, structural problems and mold. This will clue you in to exactly how many problems you're facing.
Take some time to really assess every room and system in the house. Keep a list not only of the big-ticket items but also the smaller, less expensive things you'd like to change, like replacing the kitchen sink.
Unless you're going to do all the work yourself, it's sensible to have a contractor come in to provide estimates for the projects you'd like to have done. If you're doing the work yourself, estimate how much the materials you'll need will cost and how much time the repairs will take.
With all of these factors in mind, talk to your real estate agent about the eventual value of the house after all of the repairs are made. This will let you know if this fixer-upper is worth the price.
Are You In It for the Short-Term or the Long-Term?
If you're looking to flip that fixer-upper for a quick profit, then time is of the essence. The longer you own the home, the more mortgage payments you'll have to make on it, and that may mean losing money. Expert flippers do their work in just a few weeks or perhaps a month or two at the most. This enables them to turn a tidy profit, and this strategy could work for you if you're prepared.
You may get more benefit from buying a fixer-upper if you plan to stay there mid- or long-term. This provides you with an opportunity to build equity and turn the house into a dream home. When you decide to sell in a few years, you'll stand to make a nice profit.
When to Hire a Professional
Some people want to be able to do the renovation by themselves. If you are a construction worker, have a background in engineering or are a contractor, you're probably up to the task. However, if this is your first opportunity to do some major home renovations, then it's wise and cost-effective to consult with a professional.
For instance, if your project deals with the plumbing, electrical or heating and cooling systems in the house, you probably need an expert. Errors on these tasks are costly, not to mention dangerous. You also may need assistance if you're pouring concrete for a driveway or installing a new roof. These are big projects that really do need the expertise of a professional.
Take Baby Steps
When you buy a fixer-upper, it's easy to feel overwhelmed with the sheer number and enormity of the projects that are needed. Instead of taking on everything at once, focus on a small task that you can accomplish like replacing the bathroom faucet, changing the light fixture in the dining room or fixing a doorknob. Each task, from replacing a window to remodeling the kitchen, can be accomplished by taking just one small step at a time, and each of those steps takes you closer to your dream home.
Need Someone to Guide You Through the Process?
Waypointe Realty provides comprehensive services to its clients whether they want to buy a new construction home or a fixer-upper. If you have your heart set on a house that needs quite a bit of love, then talk to the experts at WayPointe to figure out whether or not it's a good candidate to become your dream home.