Things To Consider When Choosing A Fixer Upper Property
As its name implies, a fixer-upper refers to the kind of property that you purchase for a very low price, with a need for a significant renovation. The purpose of buying a fixer-upper could be for re-sale or for personal use as a part of your real estate investment portfolio. Generally, purchasing a fixer-upper can be a good financial decision, but it also requires a sound knowledge of what you're getting into, from being able to identify necessary renovations to budgeting accurately for repairs. You should never inspect a property and purchase it on the same day, without thinking it through.
Your choice of a fixer-upper property may end up being a regrettable one if you're not cautious with your decision. This is a mistake that you'll want to avoid; even if the price is low, a chunk of your hard-earned money has still gone into the property. You can’t simply return it when it doesn’t suit your preferences anymore.
If you've long been thinking about buying a fixer-upper property, you should consider the following:
1. Determine The Repairs That You Can Do Yourself
Typically, fixer-upper homes are in dire need of restoration. But repairs shouldn't solely be done by professional contractors; depending on the work required, hiring a contractor's services can be quite costly. This defeats the purpose of a fixer-upper—especially when you intend on selling the property quickly. There are many different home buyer companies who will pay cash to make the process easier. The Trusted Homebuyer, for example, states we buy houses in Arizona fast and for cash. Companies like this offer great opportunities for sellers.
Before you head out hunting for fixer-upper properties, it's imperative that you first determine the repairs that you can do yourself. That way, you can budget for the major repairs that will require professional help. Just be sure that you're capable of completing the work accurately and to a high standard.
Some of these easy fixes include:
· Exterior painting
· Laying carpet, floorboards or tiles
· Adding a deck
· Refinishing floors
· Changing light switches
Once you've ascertained the necessary repairs, you can factor them in as you go through different house options. You may then choose to focus on properties requiring limited repairs that you know you can do yourself.
2. Look For A Good Location
Just like any other piece of real estate, the location is very important in picking a fixer-upper property. No matter how great the potential of the fixer-upper, if the location is poor, then it may not be suitable. If you intend to re-sell the property, this should always be a top consideration.
When you know that you're going to keep the property for personal use, factor in everything about the location that's important to you and your family. That way, when the property is move-in ready, you know it will serve your family's needs.
3. Price The Renovation Costs
Renovation costs are those associated with renovations that must be completed by professional contractors, and any materials required in the process. Before you make an offer to buy a fixer-upper, obtain quotes on repairs that you believe are best left to the professionals. That way, you can be sure that you're not losing more money than if you had purchased a brand-new property instead.
After your chosen contractor has provided an estimate of costs, add at least 10 to 20 percent on top to cover any unforeseen expenses. It’s always better to have money left over, than to be scrambling for extra cash during the renovation process.
4. Do A Complete Home Inspection
As you consider different fixer-upper homes to purchase, don't just check for the repairs that are required. Thoroughly inspect the property to ensure that once renovations are complete, the home will be safe and livable. While there are many properties for sale, some are of inferior quality, so you must be very careful.
Inspect for the following:
· Pests, as these can cause significant problems in the long run
· Structural integrity, to ensure the home is stable and structurally sound
· Sewer lines, as these typically deteriorate over time
Conclusion
A fixer-upper home is an excellent real estate investment choice, so don't waste the opportunity by choosing the wrong home. As you would with any other investment, take the time to think through your options. If you utilize these pointers as you decide on a fixer upper, you’ll save yourself from the nightmare of choosing an inadequate or costly property. Be prudent, and soon enough, you could be the owner of an asset that will only increase in value over time.
