Buying a fixer-upper is a great way to save money on your first home, but it’s also a great way to end up in over your head. For a fixer-upper that’s worth the time and money, buyers must be cautious and do their research before purchasing. Here are five things buyers should consider when taking on a fixer-upper home.
Finding a Fixer-Upper
Location is what makes a fixer-upper worth the time and money. In undesirable neighborhoods, renovations don’t necessarily offer a sizable return on investment. While the home may look much better, buyers with big budgets aren’t shopping there. So, while the average listing price for a fixer-upper in New York may sound like a lot, buyers have the security of knowing a renovated home will fetch top dollar when it’s time to sell.However, a good neighborhood alone doesn’t mean a fixer-upper is worth buying. Look for homes that primarily need cosmetic improvements, not structural and mechanical overhauls. Always get a home inspection before buying a fixer-upper so you know what you’re getting into. In addition to problems with the foundation, plumbing, and electrical, look out for homes with awkward layouts. Buyers want a floor plan that flows, and moving walls is rarely cost-effective.
Estimating Repair Costs
Once you have an inspection report in hand, you can make an informed estimate of a home’s repair needs. It’s important to price out renovations before making an offer on a home. For work that you plan to do yourself, price the supplies and equipment you’ll need to get the job done, as well as costs incurred while the home is under construction. For example, the cost of eating out should be factored into renovations that render the kitchen unusable. For jobs that require professional labor, get quotes from contractors, and research the average cost for jobs before blindly jumping in. For example, a kitchen model in New York City will run you between $13,770 and $35,817, so it’s always important to figure these costs into your budget beforehand. If you fail to do so, you might find yourself in dire financial straits.
Prioritizing Renovations
Fully renovating a fixer-upper can take months or years to complete. If you plan to live in the home while renovating it, it’s important to prioritize projects that address function before working on cosmetic improvements. Young House Love urges buyers to start with projects that make the home safe to live in such as replacing broken windows. Next, deal with things that will be easier before the house is full of furniture including tearing up carpeting. Once these projects are out of the way, buyers can move onto projects that will make the house comfortable.
DIY-ing it Right
If saving money is a priority, you’ll want to DIY as many renovations as possible. Before starting a project, make sure you have the right tools for the job. While you probably own a tape measure, an excellent drill, and some well-used screwdrivers, you may not have the sanders, power saws, stud finders, and other tools you need to achieve professional-quality results. Before you decide to DIY a project, weigh the cost of buying and renting tools against the cost of hiring a professional to complete the job.Safety is paramount when DIY-ing home improvement projects. While the right tools make a job safer, appropriate clothing and personal protective equipment are equally important. HowStuffWorks instructs homeowners to wear fitted clothing and closed-toed shoes, remove jewelry, and use ear and eye protection when working with power tools. Fortunately, staying safe doesn’t cost a lot of money; on Amazon, you can find ear protection for around $10.
Flipping a Fixer-Upper
Buyers should know if they plan to live in their home or sell once it’s renovated. Homes bought for flipping should be decorated to appeal to the masses — neutral colors, hardwood floors, and stainless steel appliances. However, buyers intending to live in the home have more freedom to design to their tastes.Buyers should also consider the market. If local housing prices are skyrocketing, it may be wise to sell as soon as the house is fixed up. But if prices are on a slow but steady rise, living in the home for a few years may make better financial sense.When you want an affordable home in a great location, a fixer-upper seems like the obvious choice. But if buyers aren’t careful, they could end up spending more than they bargained for. Rather than buying the cheapest home you can find, look for a fixer-upper in a thriving neighborhood with manageable issues you can DIY.
This article was written by Bret Engle of http://diyguys.net
