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Everything to Know about Buying a Fixer-Upper
Fixer-Uppers are your best-friends when it comes to buying affordable houses in good neighbourhoods! They are cheaper and smarter investments! However, buying a fixer-upper house is a tricky business! With the right moves and knowledge, you can turn your small investment into a showstopper with maximum pay-off! Alternatively, if you don’t play your cards right, you may end up with a money pit that breaks your bank! So how do you avoid ending up in such a situation? How do you differentiate the right fixer-upper from the wrong one? Well, keep on reading to find out! We’ve covered everything you need to know about buying a fixer-upper including some great tips and tricks to eliminate the risk of ending up with a cash drain.
What is a Fixer-Upper House?
Fixer-Upper Houses may sound like a scary risky term to the average person! However, the term simply means buying a house that needs repairs for a cheaper price. These houses need a little bit fixing and tweaking; maybe even a remodelled room or two! However, by making the right moves, you can get away with buying a fixer upper and repairing it to its glory for minimum cost! Thus, you can end up saving thousands of dollars.
To sum it up, Fixer Uppers allow you to get larger homes at the same cost as smaller ones. However, they do require a little bit of knowledge, effort, and hard work.
Tips for Buying a Fixer-Upper House
We have all heard of horror stories regarding Fixer-Uppers. However, that only happens if you don’t have enough knowledge about the subject. By knowing all the tips and tricks about buying a fixer upper, you can get away with purchasing your dream house at an extremely discounted rate. Alternatively, if you dive in without any research, you may end up spending more money in the process!
Mentioned below are a few tips for buying a fixer-upper house that will greatly eliminate the risk of buying the wrong fixer upper that requires too many remodels. Follow them to turn your small investment into a huge pay-off!
- Choosing the Right Location
Location is everything when it comes to buying property! This may surprise you but even if you end up buying the wrong house in the correct location, you will end up with a lot more profit than loss.By putting in effort and hard work, you can fix the little repairs in your newly purchased fixer upper. Then, you can sell it for a huge profit! This won’t be difficult as most people are just looking for aesthetics and cosmetic appearances. Thus, simply add in a renovation or two and enjoy the huge pay off!You can also choose your ideal over-priced locality and buy a fixer upper for a steal price. Thus, you will be able to enjoy all the perks of your neighbourhood without causing irreversible damage to your bank account.
To classify the quality of a neighbourhood, study the local market trends and the demand of the school district and local businesses! You can also ask your realtor for more information regarding the selling points of houses in the locality.
- Good Structure and Layout
A fixer upper with good bones is mandatory! This is because if the construction or layout is faulty, you will have to remodel it. The remodelling process is extremely expensive and will require hundreds of dollars. Thus, fixing the house may end up going way over your budget!You can easily compromise on carpets and paints as these are cheap fixes. However, faulty foundations and roofs are extremely expensive to fix, and you can’t compromise on them. Thus, make sure to thoroughly get the property examined before putting in your offer. The inspection will identify the money pits in the house and help you eliminate the risk of buying a cheap house that requires expensive renovations.We recommend looking for open houses with spacious rooms that are full of natural light. Make sure to check out the layout plan including the floor plans and the bedroom arrangement before buying your upper fixer.
- Home Inspections
This is perhaps the most important tip for avoiding a horrible investment! Make sure to get in good home inspectors before buying a fixer upper. They will recognize any faults in the house and give you an idea of all the money that will go into fixes and repairs. Additionally, you will be able to identify the deal breakers like horrible plumbing and bad wiring. Both these things are extremely expensive to update and fix.Your home inspector will identity all the fixes that the house requires. Now, you can add all the repair costs into your budget and pick out all the important repairs that need to be done right away. - Other Inspections
Apart from your home inspection, get the follow things inspected to avoid any disasters!Roof Certification- This will identify the materials used in making the roof and its quality. It will also tell you the remaining life of the roof and how long it can survive.Pest Inspection- Rodent and termite infestations can turn your house into a money pit and causes several health issues. Thus, make sure to get a pest inspection done before buying your fixer upper.
Sewer Line Inspection- Sewer lines and septic tanks of you house need to be in prime condition. Thus, make sure to get them checked.
- Realistic Budgets
When it comes to buying a fixer-upper, you don’t just have to include the initial buying cost in your budget! In fact, you need to be prepared for some unforeseen repairs that maybe a little heavy on the pocket. You may find rotting wood underneath your floorboard or even some pesky pests that refuse to leave!A remodelling calculator will give you a rough estimate of the total cost of buying and repairing a fixer upper. However, we recommend adding 10 percent to the calculated amount to be prepared for any emergency repairs. Although DIY-ing certain things will help you save money, most renovation projects will need to be left to the pros!
Pros and Cons of Buying a Fixer-Upper House
Buying a Fixer-Upper House comes with its own set of pros and cons. However, if you play your cards right, you may be able to get away with a lot more pros and avoid a few major cons.
Mentioned below are all the perks of buying an upper fixer house along with all the disadvantages.
Pros
- Lower Buying Prices
Fixer Upper Houses are way cheaper than buying a perfect house in prime condition. They have lower buying prices, and you can end up saving thousands of dollars!According to research conducted by Zillow real estate experts, fixer upper houses are 8% cheaper than market values in listings. - Investing Money in the Right Places
Buying Fixer Uppers allows buyers to choose their investments according to their likings! Thus, you can remodel your kitchen, bedroom, bathroom or any other area of your house that is the most important for you! You will not be able to enjoy this perk if you buy a ready to move in house as you will have to adjust to the previous owner’s likings and interests. - Lesser Competition
Fixer Uppers don’t have as much competition in the market. This is because people are not willing to put in the effort to understand how to buy the right fixer upper. They also do not want to put in elbow grease to fix all the faults in it. - Smart Investment
Fixer Uppers are better investments than move in ready houses as there is a lot more room for increasing the initial investment. However, it is important that you figure out all the renovation costs before buying your fixer upper. This will help you in choosing a house that can be fixed for minimum cost and has a maximum return profit.Investing in bathroom renovations and outdoor updates will greatly increase the re-sell value of your house. Alternatively, if you spend money on adding decks and swimming pools, you won’t get a very high return value! - Better Neighborhoods for Cheaper Prices
Good neighborhoods with good school districts are extremely expensive. Moreover, you won’t find a lot of them in listings! Hence, you can look for fixer uppers instead. They are a good and smart way of getting into a good neighborhood.Additionally, investing in a better neighborhood means better re-sell prices! Thus, all the money you put into fixing your house may even get doubled!
Cons
- Remodels are Expensive!
Although you may be able to save up a lot by purchasing an upper fixer house, be ready for some surprise expenses! You may end up discovering rotting woods, insect infestations or any other repair issues which may cost hundreds of dollars! Additionally, if you want to remodel the house to your liking, expect to go 10-25% over your buying budget. - Long Term Projects
Unfortunately, you can’t move into your new fixer-upper instantly! Instead, you will have to wait weeks and months for repairs to be completed! This requires both, time and effort! Thus, be prepared to put in some serious hard work when buying a fixer upper. - Exceeding Budgets
Fixer-uppers are notorious for surprise costs! There is a high chance that you might end up finding several things that need to be fixed. All this will add to your total cost, and you may end up going way over your budget!
Selling a Fixer-Upper House
You may have bought a fixer upper with the intention of fixing it up and selling it for a huge profit! Or, you may have an old family house that classifies as a fixer upper, and you may be interested in selling it. So how do you get the maximum profit out of your fixer-upper? What repairs should you conduct yourself to increase your property’s market value?
Fortunately, you do not need to conduct expensive remodels to increase your fixer-upper’s value. Instead, by focusing and investing on the right repairs, you may get a huge turn-out with minimum effort! Basically, you need to find the balance between doing too much and doing too little! You need to discover the right fixes that will make your house twice as attractive but that don’t cost a lot.
Here’s a few tips for selling your fixer-upper house for maximum price.
- Deep clean your house! Make sure to de-clutter and get rid of all the unwanted items. Additionally, wash the windows and shampoo carpets to remove stains and odours. This will make your house twice as attractive and increase its value tremendously.
- Fix the inexpensive repairs like freshening the wall paint, installing bulbs, replace leaky faucets and get rid of damaged blinds. Moreover, fix any active roof leaks. This will make a better impression for buyers and make your fixer upper look more comfortable and safer.
- A home inspection is an easy affordable way to put buyers at peace while also increasing your house’s retail value. This is because buyers will already know exactly what is available and won’t haggle over degraded house parts. Make sure to look out for plumbing issues, electrical issues, faulty HVAC systems, structural issues and water damage in your inspection.
- Renovate the outdoor space of your fixer-upper! This includes fixing your yard, trimming trees, cutting grass, power washing the deck, driveway and walkways and replacing old mailboxes.
- Focus on the right repairs! Conducting minor repairs in your kitchen and bathroom increases the value of your fixer-upper greatly. Alternatively, investing in expensive remodels of living rooms or bedrooms may not give you a huge pay-off.
- Lastly, emphasize on all the great selling points of your fixer-upper! This includes highlighting the potential resale value of the house post repairs! Additionally, if it is located in a nice locality, make sure to focus on this and play up this selling point.
Bottom Line
To sum it up, Fixer-Uppers are a great way to get your dream house in steal prices! With a little bit of effort and hard work, you can turn them into stunning showstoppers at a minimum cost. Just make sure to do your research properly and you’ll be good to go!
NELA Group is committed to providing a better quality of life through housing that enhances health, happiness and well-being. Call 323-770-4510.