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Thanks to popular shows like HGTV’s Fixer-Upper, the idea of buying a despondent home, fixing it up, and ultimately selling for a profit has become a viable one. But beyond the romantic notion of making something beautiful out of something broken is the reality of the many possible pitfalls that come with such a venture. Properties damaged by natural disasters or fires or even a burst pipe often reveal myriad issues beneath the surface, making your investment a risky one. But on the other hand, these homes may have tons of potential.
With these considerations in mind, it’s a good idea, therefore, to approach the venture with equal parts open-mindedness and caution. Here are some smart measures you can take before taking the plunge.
Have a plan.
Like everything else, it’s more than wise to have a plan before deciding whether to buy a fixer-upper or not. For starters, you’ll want to figure out what you want to do with it. Perhaps you want to buy the house to live in or rent out, or maybe, you’re open to tearing down the structure for land. Moreover, you’ll also want to determine your budget to assess how much work on the property you can realistically pursue. Determining these factors right off the bat will be a huge consideration in your next steps, so start here.
Consult the pros.
Next, you’ll want to bring in the professionals. These are specialists who can objectively assess the house from top to bottom and give you a clear and honest picture of what you might be up against. At the most fundamental level, you will need the foundation, roof, sewer system, and walls thoroughly inspected by a reputable company like Multi Point Home Inspections. You will also want to bring in an exterminator to check for insect damage and an engineer to determine natural hazards and geological concerns. These, of course, barely scratch the surface as there are, in fact, more comprehensive home inspections you can—and should—do.
Weigh the costs.
With solid recommendations from inspectors and specialists, you can now further determine whether the house is worth buying, as well as have a more tangible idea of how much it will cost you. It’s a good idea, therefore, to really hunker down and make a list of the repairs and improvements that need to be done, as well as get quotes on how much they will cost.
As you weigh the expenses that repairing a fixer-upper will demand, consider adding as much as 20 percent to your estimate. This is especially crucial for major repairs like reinforcing the foundation, upgrading HVAC, repairing the electrical system, and addressing issues with mold or asbestos—to name just a few. Doing so will give your budget the much-needed wiggle room, so you’re better able to handle surprises as they occur.
Recognize potential.
Finally, while it may seem like a good idea to do so, don’t write off a fixer-upper because of the cost to fix it just yet. In many cases, it can still prove to be a sound investment, making it very important to keep an open mind and not ignore potential.
One feature that you should be on the lookout for is location. There is a reason why realtors put a premium on such a factor, and that is because the right location will guarantee that buyers will come running if you ever decide to sell later—which, by extension, ensures that you enjoy a healthy return on your investment. So if a damaged property is in close proximity to schools, shops, restaurants, and even Starbucks, it may be worth going for it.
Another thing to consider is how handy you are. If you’re capable of making repairs on your own, you could save considerable money. And keep in mind that the cost of tools doesn’t have to be prohibitive when you purchase from major retailers like Home Depot and Walmart. If you pair savings with online coupons and promo codes, you can find tools at a discount.
Ultimately, the decision to buy a fixer-upper hinges on the amount of TLC you’re willing to put in it and your willingness to take risks. But with the right approach and a positive mindset, there’s very little chance for failure.
Multi Point Home Inspections is a trusted and experienced provider of home inspection services. Call 561-445-2297 or complete this form to learn more!