Buying a Gut Job
Right At Home Daily:
Finding It: Buying a Gut Job
By Jim Sulski for Right at Home Daily
Located on a shady lot, a block away from an elementary
school, the quaint century-old Georgian had storybook-like curb appeal.
Inside, however, the house was a disaster. The electrical
and plumbing systems were primitive, there was only one antiquated bathroom
on the second floor and the secondary bedrooms were the size of walk-in closets,
but without closets.
The
couple that bought the Georgian made a quick decision: They would gut the
house to carve out their dream home inside.
Gut-jobs are becoming more popular as the country's housing
stock ages, and as homeowners migrate to established neighborhoods but still
crave the modern amenities found in new homes. Also, many people completely
change the layout of the house to suit the family of the 21st century.
In certain areas of the country, the gut-job has gone one
step further with a trend known as the teardown: To purchase a home solely for
its location. Once the ink is dry on the sales contract, the house is demolished,
making way for a new and usually much grander house at the site.
Buying a gut-job is actually a rather simple, but expensive,
process. What you're looking for is the worst house on a good block in a desirable
neighborhood. The worst condition the interior is in, the better. That means
the house should sell for a lot less -- at least 25 percent less -- than its
comparable neighbors.
The downside of a gut-job is the cost. Often, gutting a
home and building a new interior is more expensive than building a comparable
new home.
Except in those housing markets that are experiencing over-inflation,
most homeowners of gut-jobs wouldn't be able to recoup their home investment
if they immediately put the house back on the market. What they get for their
money is the house they want, in the location they want.
