A fixer-upper is an opportunity to create exactly what you want from scratch. Finding a home that has the right things wrong with it, can be the foundation for your dream home. What’s more, you have the chance generate some wealth-building in the process.
You don’t have to be a master builder. A little bit of time and patience is all you need. Before you buy, consider these four things to see whether or not this fixer-upper is a keeper.
Look at the price
Fixer-uppers should always come at a lower price. Take your time and do some homework before you fall in love with this house. If the price is right and all feels good, then go ahead and fall in love.
You’ll need to research the neighborhood and see what other homes similar to yours are selling for and how updated they are. A realtor can help. You need this information before you begin to re-do the house.
You don’t want to make the mistake of over-improving compared with the value of the rest of the homes in the neighborhood. This is especially important if you want to sell the house in the future. This is the market you’ll be competing with the rest of the homes in the neighborhood. Treat a fixer-upper as a business and not just a weekend hobby.
Evaluate your needed improvements
“Instant equity” is an opportunity that fixer-uppers offer you. This means that when you sell your home, you’d be getting back the cost of re-doing it. A fixer-upper is a project in which you can actually see a return on your investment.
Some simple projects can be done yourself with and some time and patience. Painting and landscaping are good examples. You want to keep in mind high value and low effort for these projects. You can easily bring a yard back to life with a little care and planting a new garden.
Bigger projects such as kitchen and bathroom will need the assistance of professionals. Before paying anyone, be sure to weigh the value of their services against the value of your home.
Add instant equity
Most of your home improvements are going to add equity to your home instantly, but you may need to hire a professional for some of them. It comes with a cost, but the cost becomes worth it when you have a major project done professionally.
You’ll probably want to have a professional do these projects: Install a new roof, refinish your hardwood floors, and replace or add insulation. Statistics show that each of these re-dos can recoup up to 109 percent of your cost when you sell your house. Once completed, while you’re living with these fixes, your energy costs should be lower.
Almost any project for your fixer-upper is worth it if the price is right. While you may not be able to recover the full cost, you’ll get a very high percentage back and have the satisfaction of living in a dream home that you built and created.
Patience is important while overseeing the remodeling of your fixer-upper. Doing these projects yourself and having professionals do them takes time. Let your patience be longer than your home’s to-do list and count on extra time for things to be completed.
A bathroom renovation could take anywhere from two to three weeks. New flooring, a kitchen remodel, and cosmetic work on your home could take an entire summer.
Consider the toll a fixer-upper can take on your emotional well being. Brace yourself for any project delays or extensions and just add extra time for completion.
The rewards will be great if you employ some strategy. Budget your time and money, too. The joy of living in a home that you’ve just helped to create will far outweigh any stress endured during the process.