Buying a run-down or neglected property can often seem like an affordable option, especially for first-time buyers. However, buying a fixer-upper home is a big commitment and will take a lot of time, money, and effort. But if you’re up to the challenge, renovating a property can help you get a good return on your investment when it comes to selling and moving again.
Read our beginners guide to finding the right fixer-upper and what to do when you’ve chosen one.
What to Consider When Looking For A Fixer-Upper
There are lots of fixer-upper properties out there that have potential, but it’s essential to choose the right one so that you don’t waste your money and time.
While there’s only so much you can tell from a property viewing, it’s important to keep an eye out for any potentially expensive problems. You need to distinguish cosmetic issues and dated decor from substantive things that are going to cost thousands to fix. These are a few of the bigger fixes and renovations older properties might need:
- Replacing old pipes and plumbing
- Updating the electrical systems (especially if they don’t meet today’s standards)
- Replacing windows and doors
- Structural problems, issues with the foundations or the roof
- Damp-proofing and mold removal
- Pest control and damage from pests
It can be costly to make significant changes to a property, like adding and removing walls. So look for a fixer-upper with a good layout that will make it easy for you to update it.
An open-plan living-dining room layout is trendy and can make a place feel more spacious. But think about how you want the space to work for you, as you’ll have to coordinate the interior throughout, and that might mean that you can’t use the living room or dining room while it’s being renovated.
You should consider the location that you want to buy a fixer-upper. You can make all the improvements to a property, but if it’s not in the right area, its value will not increase as much as you want it to.
Look for up-and-coming neighborhoods that people are starting to move to because they’re more affordable. Take a look at the surrounding homes in the area to see how well they’re maintained and whether they’re owned or rented.
What to Do When You’ve Found a Fixer-Upper
Once you’ve found the perfect fixer-upper for your needs, there are still a few things you should be aware of.
Get the Property Fully Inspected
It’s important to get the property thoroughly inspected. It’s worth spending more on your inspections to find out if there are more serious issues than you thought. Make sure you’re looking at everything from the roof and pests to sewerage.
Get an Idea of Costs
For some of the more extensive renovations that you won’t be able to do yourself, get quotes. You need to have an idea of how much things are likely to cost and always overestimate. Often, things will take longer or cost more than anticipated.
Find Out What It’ll Be Worth
You need to make sure that you don’t end up spending too much on a fixer-upper, otherwise, you’ll end up losing money when you come to sell. Get an idea of how much other properties in the area are worth, work out the difference from what you’ll be paying for your property, and aim to get it up to a similar standard for less.
Negotiate the House Price
If you’ve found some major issues with the property that are going to cost you thousands, try to negotiate some money off the price. They’re going to have the same problems with any buyers, so it’s worth saving yourself some money to cover some of the essential costs.
Know Your Priorities and Limits
Renovating a house can quickly drain all your money and resources if you don’t plan it carefully and stick to a budget. Make a list of all the priorities, updates, and improvements — the things you need to do to make it livable. Outline the costs and how long you expect these things to take so that you know what’s involved.
Then make another list of all the things you’d like to do eventually. Work your way through the first list before starting any cosmetic or less important changes.
Consider Your Living Arrangements
A lot of renovations are noisy, messy, and disruptive. It might be difficult to live there while they’re happening, especially if you’re doing something significant like replacing the roof or the plumbing. So you need to consider whether you can live somewhere else while you get some of the bigger projects completed.
If you can’t stay with friends and family then you may need to pay for a rental property on top of your mortgage payments. You’ll also have to think about moving into the property and whether your possessions will get damaged or if you should put them into storage.
Buying a fixer-upper can be a great project, but it will take time, money, and a lot of effort. So you need to make sure you carefully consider all aspects and be clear on your limits financially and logistically.
After reading this essay, you should have picked up a new skill. On this page, you’ll find more recommendations: How to do Home Renovations after Moving to Another House
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