Before you plop down your earnest money deposit there are many things you have to make a decision on—like location, price range, and if you want a turn-key home or a fixer-upper.
Before deciding you want to buy something in need of some elbow grease and TLC, consider the pros and cons of buying a fixer-upper.
Pro: It’s an opportunity to save money.
Buying a home in need of updates and repairs will cost much less than buying a move-in ready home. While it can be hard to put an exact number on how much you’d save—as each home is different—the potential is still there.
Con: You might go over your initial budget.
Even though you will save money in the long-run, you should still expect to spend money if you buy a fixer-upper. In fact, you should create a budget and then plan to go over it. Only one out of five homeowners come in under budget on their renovations.
Unfortunately, when buying a cheaper and older home that requires work, anything is possible. It’s not uncommon to stumble upon asbestos, structural issues, or outdated electrical wiring. To prevent losing all of your budget to problems such as these, expect the unexpected and plan ahead.
There are a number of vital things to consider before moving forward with a fixer-upper house. Due diligence is of the utmost importance.
Pro: Renovations can potentially increase the value of your home.
Big-ticket projects—such as a kitchen, bathroom, or master suite remodels—can provide a high return on investment, increasing the value of your home. Before jumping into a large-scale project such as a kitchen remodel, it’s a great idea to prepare yourself.
Start by researching kitchen remodel costs in your area, to give yourself a sense of what your project may look like in terms of spending. Then consider speaking with realtors and your neighbors to see what features the homes around you may have. That way, you have an idea of what aspects or materials may boost your value. For best practice, take these steps for any project you’re thinking of doing, to ensure you have the smoothest renovation possible.
Con: You may not increase the value to surpass that of your neighbors.
It’s essential to keep in mind that not all home renovations will add resale value to your home. You’re going to be completing renovations based on what is the best fit for you and your family, and not all homeowners are going to see the value in some projects.
For example, the removal of rooms and bathtubs can be received poorly if you plan to put your fixer-upper on the market. Additionally, over customization can turn future buyers off as everyone has different design preferences. Try to avoid luxury renovations if they don’t match the properties around you, as they also will not provide you with any additional value.
Pro: You’re in control.
Starting from the beginning can be exciting for you as a new homeowner because you have the chance to transform the space into your dream home. You can have free reign and make decisions throughout the process based on your preferences. That means contractors, building materials, colors, is solely up to you. You’re in charge of where your money goes, and which areas of the home you want to invest the most in.
Con: You won’t know if there are any issues until you begin the demo process.
The status of your fixer-upper may not seem too bad from the outside, but in some instances, you may not find underlying issues until you begin the demo process. Instead of realizing that you bit off more than you can chew, invest in a well-rated home inspector to thoroughly look over your home.
If you bring in an inspector and they find more issues than you can count, this provides you with an opportunity to opt-out of buying that particular house before you’re up to your knees in costs and repairs.
Make sure you have a checklist of the most frequently asked questions for a home inspector. It is essential there are no surprises for you as the home inspection will be one of the most vital parts of the process.
Pro: You can DIY a lot of the work yourself.
Doing the majority of the work yourself is the best aspect of a fixer-upper. This is also another feature that can help you save money. Take the time to seek out materials you desire from big-box stores or antique stores and flea markets. Purchasing and installing your own materials such as flooring, cabinetry, and new fixtures are easy to tackle and can leave you feeling a sense of accomplishment.
Other DIY projects you can take on are light demolitions and cosmetic finishes. Light demo entails removing unwanted cabinets, fixtures, and flooring, which can pave the way to begin putting the space back together. Cosmetic finishes, such as laying backsplash and tile, painting, and laying new flooring, are great ways to finish off a room.
Con: You may need to call in professionals.
Some jobs are just better off left to the professionals. While DIY projects are fun and can save you both time and money, it’s vital to remain realistic. If you’ve never completed intricate home projects, consider bringing in a pro to protect you from additional work. Some jobs, in particular, that you should leave for the pros are structural repairs, asbestos removal, and any gas, electrical, or plumbing work.
Structural repairs should not be taken lightly, especially if the house is older. If not corrected early on, fundamental issues can create more problems down the road. Asbestos is not something anyone wants to uncover in their remodel process, and it’s not an easy process. Asbestos requires both professional testing and removal. Gas, electrical, and plumbing projects require permits and have to be completed up to code.
Buying a fixer-upper may not be for everyone. It can be extremely time consuming, but at the end of the day, you’re able to reap the benefits of your hard work in a home that you genuinely love. And by considering these pros and cons, you can successfully determine if a fixer-upper is right for you.
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About the author: The above article comes from the expert professionals at Home Advisor.