You may have found the neighborhood of your dreams taking a walk through the city. You may even have gone as far as researching home prices in the area only to find them shockingly expensive. If you fit the latter description, you are certainly not alone! Are fixer-uppers really worth the investment?
Fixer-uppers are usually homes that are in need of what real estate agents label “TLC” or better known as “tender loving care”. Your agent may go as far as telling you that it needs some cosmetic work and minor repairs, which in turn makes you feel giddy at the price it’s listed for. Once you have purchased it, reality may hit hard and your budget may suffer in turn.
Most people are unrealistic about the hard work and labor that it really takes to transform a fixer-upper. The house on the outside may be charming, but there is more to homes than meets the eye. Even an inspector can’t always give you a realistic inspection, and you may encounter trouble along the way.
Is the home really worth fixing? A home is only worth its weight in gold if you are purchasing it in a highly sought after neighborhood. Fixer-uppers in high-end neighborhoods can be worth thousands of dollars more once the renovations are completed. However, for every occasional good deal, some homes are just not worth the extra labor and investment.
Buying a fixer-upper is only beneficial if you can actually do the labor yourself. Contractors charge by the hour and charge for the materials as well. In most cases, what the contractor charges to fix the home will bring the home’s total added cost to what you would have paid had you bought a non-fixer-upper. When looking at homes in need of a TLC, keep in mind that you should be the one doing the labor of love.
Are there deep-rooted issues? Older homes will undoubtedly suffer from infestations, foundation issues, mold, water damage and perhaps even asbestos. The older the home, the more problems that you will be forced to encounter. Foundation issues and mold/water damage are probably the most common problems encountered by home buyers looking to snag a good deal.
It is not easy to stick to a solid budget when appraising how much it will cost to renovate a home. You may set aside what you believe is enough money, but as was mentioned, issues can constantly arise in the woodwork, plumbing or the foundation. You need to be entirely realistic when considering if the home you’re looking to buy is something you can truly afford to fix. Never buy a home with the intention that you can fix it as money comes along (that rarely works out).
If you are well-versed when it comes to investing in real estate fixer-uppers, there is a chance that you can really snag a good deal. Unfortunately, home buyers get caught in a web of constant renovations and nightmares when they purchase a fixer-upper. The real question is do you have the budget to really fix it?