There are many things to think about when you start the homebuying process, especially if you are a first-time buyer, and fixer-upper properties might be one more topic you want to add to the list of discussions to have with your real estate agent. Opinions vary greatly when it comes to fixer-upper homes for sale, but until you’ve done research and gotten some facts, you won’t know if this is a route that’s fitting for your particular situation or not.
Many people have found great deals by purchasing a property that needed some work, while others have gotten stuck in a position that cost them a lot of money and gave them nothing but headaches. To make sure this doesn’t happen to you or that you don’t miss out on an excellent bargain, carefully consider the pros and cons.
Factors to Take Into Consideration
The homebuying process has just as much to do with what you can afford as with what you actually like. While you should take your time looking at homes for sale and never simply settle on a property, you must also be realistic about your budget and what will fit within it. One of the first things you should do when considering a fixer-upper is analyze the estimated costs of repair and improvements and see if the numbers add up.
No matter how good of a deal it may seem, you don’t want to end up paying out more than what you could get a comparable non-fixer-upper for, and if you’re wanting to turn it into an investment property, it must actually be able to make you a profit.
Other factors to think about include what exactly needs fixing up and if they are projects that will add value to the home, if you plan to do the renovations yourself or who you will hire to do them, the quality of the original construction and prices of neighboring houses in the area.
Reasons it Might Not Be a Good Idea
Just as with any home you’re looking at purchasing, a thorough inspection is very important, maybe even more so when contemplating the purchase of a fixer-upper. This will let you know if there are any damages or potential hazards with the property that can’t physically be seen.
If an inspection report comes back citing things like major structural problems, current or past termite activity, a history of flooding or nearby geological issues that could directly affect the home, you may want to just walk away from this prospect and move on to the next one.
Benefits of Buying a Fixer-Upper
With all of this being said, there are still some nice benefits that can come with buying a fixer-upper. It isn’t likely that there will be much competition when placing your bid, so negotiating a bargain price should be feasible. If you’re just looking at minor repairs, a fresh paint job, carpet replacement and landscaping, there’s a good chance you can make quite a profit by reselling.
Those that can make this a DIY project will not only gain personal satisfaction and bragging rights, but will also know precisely how to properly maintain the property. Finally, one of the biggest advantages is being able to customize the home to match your taste and style as improvements are being done.
Don’t automatically disregard fixer-upper homes for sale as you begin your search if you’re interested in finding a steal of a deal.
Tiffany Olson is a real estate junky and will read and write about it any chance she gets. She graduated from San Diego State in 2009 and now lives in beautiful Northern California where she enjoys cooking, doing yoga, and hiking.