It’s oh so tempting to consider buying fixer-uppers to save some money on your home purchase. They can be a great investment for buyers who are willing to trade some elbow grease, time, and money in order to purchase an affordable home in a neighborhood that they love.
BUT. Don’t jump in blindly.
4 things to consider before deciding that a fixer-upper is the right home for you
How many of the repairs can you do yourself to save money?
Do you have the time, skill, and desire to be in the renovation business or will living on a construction site for what could be months make you crazy? Some fixes, like wallpaper removal, painting, and even flooring can be DIY projects. But there are things that you cannot DIY, including anything that requires a license (think plumbing and electrical).
How much money will the actual repairs and remodeling cost?
It’s important to know before you make an offer what your estimated costs will be in order to (1) decide if it fits your budget and (2) determine what a fair offer might be. Once you have an estimate of the repair costs, you can compare renovated homes that have sold in the neighborhood and deduct the cost of necessary upgrades and repairs. Hint: Bump up your estimate by 20-25% to account for changes and surprises. No one wants to think that they have purchased a money pit.
Is the house structurally sound?
Hire a structural engineering professional. It’s cheaper than finding out later that you need major structural improvements. Unless you are buying at a steep discount and have a big repair budget, we don’t recommend tackling a home with structural issues.
Don’t skimp on inspections
Just because you know that you want to change things doesn’t mean you shouldn’t be aware of any potential issues with the house. A thorough home and termite inspection is still highly recommended for any buyer. At a minimum, it will help you set your repair budget or renegotiate a lower purchase price if the necessary changes turn out to be more extensive than you realized when first viewing the house.
