If you have watched your share of HGTV, then you have probably considered turning yourself into a local Chip and Joanna Gaines! Many people invest in fixer uppers, but can most definitely bite off more than they can chew!! When you are evaluating your motivations, you should consider more than just the potential of your property. Considerations such as how much time and money you will invest will help validate your decision.
First, consider the best neighborhood. You can change many things when it comes to a fixer-upper, however the location is not one. While considering your purchase focus on finding the worst house in the best neighborhood, these statistically have the best returns. While shopping for locations consider looking for places that are near schools, hospitals, parks, restaurants, or your favorite local places.
Unlike a normal purchase, you will need to assess extra expenses, besides your mortgage. While purchasing a home an inspection is recommended, fixer-uppers should be inspected with an eye towards estimating the end cost. Keep in mind the inspection and other possible renovations while considering your offer.
One of the most important things to consider when purchasing your fixer-upper is knowing the level of repairs that are necessary before reselling. Basic repairs such as painting, striping wallpaper or fixture updates are the easiest to restore. More complicated repairs such as replacing heating and air units or completing a kitchen or bathroom remodel will increase the budget. Although it is easy to get caught up in the excitement of a remodel, there are many red flags you should be aware of. It is normal to expect outdated designs, however foundation or structural issues are serious problems that can be quite costly to repair.
Purchasing a fixer-upper is very exciting and a great investment opportunity that may be very profitable. Similar to any investment, it is advised to weigh the pros and cons and recognize the potential of making a pretty penny.
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