« Beware of Foreclosure Scams! | Home | Mortgage Protection Plan for First-Time Buyers »
Tips on Buying Fixer-Upper Houses
By marionduffy | April 17, 2009
Buying a fixer can be fun and very profitable, but it can also be a financial disaster and very stressful. Here are some tips to keep in mind when you are looking at homes:
Know what you are buying. A “fixer” can mean a lot of different things, from a cosmetic fixer in need of only carpet and paint to a total dump that needs a complete renovation. Seriously consider how much work is needed. Has the house been well maintained and just needs updating or does it have some serious problems like a leaky roof and structural issues? Always, always, always get a professional property inspection!
Know yourself. If you are planning on doing the work yourself, do you have the skills needed? Many first time buyers or even experienced homeowners have started a project just to find out it is way over their head. It ends up costing them even more because an experience contractor has to do it over or fix what went wrong. Sometimes it is better to do some of the work yourself and contract out other projects. Also, do you really have the time to do it?
Know what it will cost. Whether you plan to do the work yourself or pay someone else to do it, check into the cost of materials and labor before you buy the house. Getting more than one estimate is also a good idea. Then add 10 to 15 percent to the total cost. I have remodeled several homes and they always take longer and cost more than anticipated.
Know why you are doing it. It depends on whether you are buying the house for a rental or if you plan on living in it yourself. Fixing up a house to be a rental means bringing it up to par with other comparable rental property. But if it is a house that you are going to live in, you will want to fix it up just the way you like it. In either case, don’t over do it. It is really easy to get caught up in the moment and upgrade more than necessary.
I love buying fixers but I have learned to seriously evaluate what I am buying.
Topics: Buyers, Investment Property, Inspections |