Many home buyers consider a fixer-upper as their first home. The initial cost of a fixer-upper tends to be more affordable than a move in ready home. Though fixer-uppers can often cost more in the long run. Unforeseen costs and cost overruns can quickly use up a budget and much more. Buying a fixer-upper can be a great way to buy more house than a first time home buyer could afford otherwise, but great caution should be exercised. There are several factors to consider before buying a fixer-upper.
First and foremost is patience and
temperament. Living in a home that is under construction takes patience and a
good personal temperament. A person that likes things a certain way and likes
things done yesterday should probably avoid a fixer-upper. A person that takes
joy from small but steady accomplishments and does not get upset with
unforeseen setbacks or obstacles could be a good candidate to purchase a
fixer-upper.
The next thing to consider is just how
handy the buyer is, really. It is important to be honest. Most people consider
themselves somewhat handy, but really are not. If a buyer cannot patch a price
of sheetrock, change an electrical fixture, or unclog a drain, they should not
consider a fixer-upper. On the other hand, if a buyer owns a circular saw and
knows how to use it, a fixer-upper might be a good choice.
Friends and family that work in the
trades (painter, plumber, electrician, builder) or are just good with tools can
save buyers a great deal. It is important to ask how much they are willing and
able to truly help before buying a fixer-upper. A plumber that works a 50 hour
week may not want to come over and work on a bathroom on Saturday. Having
willing and able friends and family can make a fixer-upper a good deal.
How much savings is available for
repairs? Repair budgets move upward much more often than downward. Is the money
needed to complete the repairs that need to be done available? Anticipate
unforeseen problems and rising cost to be at least ten percent more than the
original budget. Getting estimates for needed repairs before purchasing can
help buyers understand whether or not a fixer-upper is the right choice.
There are several other factors to
consider at that point before making the plunge. Many buyers are on a tight
budget and don't have a lot of money to spend, but want to live in a nice area.
Location is more import than the house itself. The house will change, the
location will not. A fixer-upper is a way to get into an area that a buyer
might not otherwise afford. A good location is necessary in order to turn your
effort into a sound investment. If a buyer can afford a move in ready home in
the area they desire, a fixer-upper may not be necessary.
Another consideration is how long the
buyer plans to live in the home. Renovations take time. Homes under renovation
are hard to sell. If a buyer does not plan on living in the home for several
years, a fixer-upper might be a poor choice. There is money to be made in a
well done fixer-upper, but there is a lot of money to be lost if the home has
to be sold before the renovations are done.
The
last thing to consider is whether the issues with the fixer-upper are cosmetic
or structural. Cosmetic issue can be lived with and corrected over a period of
time. The 1970s wallpaper in the den might not be desirable, but it can be
changed next year. A structural problem must be dealt with or may result in
larger issues. A leaky foundation can lead to mold. Structural problems tend to
be harder to correct and more difficult to estimate the cost of the repair. Buyers
will be best served by avoiding fixer-uppers with structural problems.
If you consider all of the above and are
a good candidate for a fixer-upper, make sure you do your diligence, avoid structural
issues, and chose a good location. This will go a long way towards building a
solid investment in your home. Good luck and happy hunting.
Rick is a realtor, real estate author,
and a long time Windham resident. You can contact Rick with all of your real
estate needs and questions at Rickyost@kw.com
No comments:
Post a Comment