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Buying A Fixer-Upper

Right At Home Daily: Finding It: Buying a Fixer-Upper
By Jim Sulski for Right at Home Daily

Why do People buy Fixer-Uppers?
They're looking for a real estate investment: Buy a home that needs work, throw some time and money into it, and then sell it for a profit.

Fixer-uppers are a way to buy a home in a preferred neighborhood that may otherwise be out of reach financially.

Buying a Fixer-Upper Fixer-uppers also allow buyers to create their own space. Most new homes are designed for the greatest common denominator. Fixing up an existing home allows you to personalize your living environment.

But be careful: A fixer-upper can easily turn into a money pit, which is a nightmare for those homeowners on tight budgets. And, fixer-uppers not only drain cash, but time.

Those home improvement TV shows in which a kitchen is magically transformed from a prison cell into a candidate for the pages of Architectural Digest are more fantasy than reality.

The truth is, shaping up a fixer-upper can take weeks or months, if not years. That's a lot of weekends spent with a tool belt strapped to your waist.

TAKE IT AND RUN
If you're thinking about buying a fixer-upper, here's what you should be looking for:

  • A home that needs cosmetic work (i.e. painting, wallpapering, replacing kitchen appliances, and ripping out orange carpeting from the early 1970s).
  • A home that only needs minor structural repairs, such as replacing a roof, furnace or electrical system. The home might also have a kitchen and bathrooms that are functioning but need updating.
  • A home in a desirable neighborhood that is selling for at least 25 percent less than comparable homes simply because of its condition.
  • Be wary of fixer-uppers located in an overheated market. If you buy a fixer-upper for $150,000 and spend $100,000 getting it into shape, you may wind up with a house worth less than you spent.
  • Before you buy have a professional home inspection.
  • If the home needs a lot of heavy-duty work, have a contractor give you an estimate of costs before making an offer.
  • Loans such as the FHA 203K can offer you extra cash to use for home improvements beyond what you need to buy the home.

 

Hammer Visit our forum for more useful hints on buying a fixer-upper.