Thanks to the popularity of shows on HGTV, many homeowners are deciding to buy a home that’s in need of a little TLC instead of one that’s move-in ready. And while buying a fixer upper can indeed be a way to afford a house that is otherwise outside your budget and to create your dream home right away, it’s not always the right choice for all homeowners. Whether you’re a first-time homebuyer or you have been around the block a few times, here are the things you must consider before buying a fixer upper.
No matter if you’re buying a fixer upper or not, your budget is the most important thing you must consider. However, when opting for a fixer upper, your budget becomes even more important. That’s because, essentially, you have two budgets to work with: a budget for purchasing the home and a budget for renovating the home. If you’re considering a fixer upper, be sure to factor in all the renovation costs and determine if it’s something you can actually afford. The last thing you want to do is purchase a house that needs a lot of work and suddenly realize you don’t have enough money to make it livable. When you’re doing a walk-through of the house, it may be a good idea to bring a contractor along with you to discuss what they believe a renovation cost could be.
The age of the home can be a huge factor when you’re buying a fixer upper. For instance, the house may not be built to code, which means there could be more underlying issues you’ll have to deal with. In addition, there may be other costs associated with an older home, such as removing lead paint or dealing with asbestos. Having a professional inspect the home before you buy it can help you better understand what type of project you’re walking into. According to Fix It Right Plumbing’s website, “Older homes can come with challenges that aren’t always visible to the naked eye, which is why it’s always a good idea to let a professional weigh in on projects associated with plumbing, electrical, and the like.”
Fixing up a home can take a decent amount of time, especially if there are multiple projects that need to be completed. If you have a tight timeline to move, then a fixer upper with many immediate projects may not be the best idea. However, if you have time to fix up the home, or if you can still live in the home while it’s being renovated, then a fixer upper option could work. Just be sure you have a full understanding from your contractors what type of timeline will be needed, and then be sure to give yourself some extra time for any other challenges, changes, or issues that may arise.
Renovating a home will usually always bring more equity into the home, but this is something you need to think about before you invest. For instance, you want to ensure the money you’re putting into the home comes back in equity. If you put $100,000 of work into a home, and the value of the home only goes up by $20,000 due to the neighborhood, then this fixer upper is not the best investment to make. However, on the flip side, should you put in $20,000 and add $100,000 worth of equity into the home, then it’s a good investment. Be sure to talk with your realtor about what they assume the value of the home will be after it’s renovated so you can decide if you’re making a smart decision.
Fixing a home can be stressful, as you’ll need to manage budgets, timelines, and make a variety of decisions. If you cannot handle the stress at the moment, or you have lifestyle issues that will make it difficult for you to make timely decisions, then a fixer upper may not be the best choice for you. However, if you feel like you can handle the chaos and are prepared to make all the necessary decisions, then opting for a fixer upper could be a fun adventure to take.
There is a lot of value that comes with fixing up a home, whether you want to live in it or sell it for a profit. However, before you make your final decision, just be sure you are considering all the factors that will come with a fixer upper.