With so many renovations and fixer-upper shows on TV, it's easy to be tempted to tackle one yourself. However, many people underestimate the amount of work and money that actually goes into a fixer-upper. Before you buy a one, take into consideration the tips below.
Go for Ugly
Whether you are planning to live in your fixer-upper or sell it for a profit, you do not want to purchase a home that will eat up your budget during renovations. The Balance states that the best homes to buy are the ones that mostly require cosmetic updates. Look for a home that has features some people cannot see past such as peeling paint, worn carpet and outdated interior design. These are generally inexpensive and simple fixes that can bring the asking price of a home down when buying.
This does not mean you cannot gut the kitchen and completely renovate it if that is what you want. Rather, avoid any homes that will need intense structural overhauls such as repairing the foundation or installing a new roof. These large repairs are a sure way to eat at your budget, which can easily be avoided. Make sure you hire an inspector to go through the home and assess it before purchasing it.
Location, Location, Location
The ideal fixer-upper is located in a nice area. Whether it’s the eyesore on the block or just slightly out of disrepair, the key is to find a house that is on the market for significantly less than the surrounding homes. The cost of surrounding homes will help you predict what you will be later able to sell your home for. From this, you can make your budget and see if you will be able to make a profit. To start, try looking at homes in your area. The average listing price for a fixer-upper in Colorado Spring, Colorado, is just $350,000.
Calculate a Budget
Before you put down an offer, you will need to take calculate your renovations budget. Figure out what you can DIY and what will require a pro and create estimates for every project you want to tackle. Keep in mind that different people have different strengths. Know your limits, but try and DIY as much as possible to save time and money.
Once you have calculated all this you can figure out your budget. This Old House recommends then padding your budget by 5-10 percent to account for anything unexpected. Only then should you put down an offer if the price still makes sense.
To Sell or Not to Sell
You should decide if you are planning to live in your home or sell it for a profit before you start any renovations, as this will affect what and how you plan your attack. After you've tackled anything needed to make your home livable, you should then make a list of must-haves. Not everything needs to be done at once if you are going to be living there.
However, if you are purchasing your fixer-upper in order to sell it for a profit, you will be on a tighter budget and timeline. The quicker you can make all the essential renovations, the better. You do not want to sit too long on a home if you are planning on selling as the cost of homes in the neighborhood can unpredictably change as the years go on. Be also wary of investing too much money so that it bites into any potential profit.
Start Shopping
Do not be afraid to shop around, purchasing a fixer-upper is an investment. It is a difficult but rewarding journey. Take your time to find the right home that fits your budget, time and skill set.
Photo courtesy of Unsplash. Article by Bret Engle of DiyGuys.net