A“Fixer-Upper” or a “Money-Pit?”
Have you always wanted to find an adorable fixer-upper in a great location and then work your magic to make it into your dream home or a moneymaker? Sometimes fixer-uppers turn out to be depressing downers; so, before taking on a fixer-upper, consider if it’s the right type of property for you and what it will actually take to renovate.
Here are some things to look for when deciding whether to buy the fixer upper or walk away:
- Have the home inspected!
Before you even start looking — before you even find a realtor — Do your research on a good home inspector in your area. If you are looking at an old house, make SURE to tell the home inspection service that you want someone who knows about houses xxxx years old.
PHOTO AND TITLE: Never buy a home without having it inspected by a professional
- Know your budget limits
You may get a great deal on the purchase price, but if renovation costs exceed your budget, the moneymaker can become a money pit. When your budget isn’t limitless, it becomes even more important to know what to look for before purchasing a house that needs a lot of work.
- What minor renovations need to be made?
Come up with a rough estimate of the cost to have the renovations completed.
- Painting interior walls and trim including patching damaged walls if necessary
- Flooring – refinishing wood floors or replacing tile and carpet
- Kitchen cabinets – re-facing or replacing kitchen cabinets
- Installing light fixtures and switches
- Replace locks on outside doors
- Fix broken windows, screens
- Paint the exterior house (if applicable) and paint trim
Minor renovations are expected when purchasing a home as a fixer-upper. With the money, you save on the purchase price, your budget should be able to handle the minor renovations.
- What major renovations need to be made?
This is where a professional house inspection is absolutely necessary. The following renovations could be a deal maker or a deal breaker.
- Structure – is there structural damage to the home
- Home foundation – is the basement dry? Does it have cracks?
- Roof needs to be replaced
- Kitchen and bath remodels necessary
- Plumbing – Need to replace plumbing, sewer lines or wiring
- Electrical system needs to be upgraded or replaced
- Replace HVAC systems or add central air
- Build garage or other additions
If your home inspection reveals major structural problems— substandard wiring, poor plumbing, ineffective heating, drainage issues or toxins such as asbestos or mold–this could become your money pit. Unless you have an unlimited budget and a lot of time on your hands, walk away from major renovations.
However, a home inspection can also support your decision to purchase the home; an inspection report can identify issues that need to be addressed so you can reasonably determine if the total cost to make the repairs and remodels will fit into your budget. Having this information in advance will assure you the best possible outcome.