Is Buying A Fixer Upper Home Right For You?

Before you go out and buy a fixer upper home, there are a few things you need to know.


Why Would You Ever Buy A Fixer Upper?

While it might seem odd to purchase a home that needs extensive repairs, people end up making tons of money by doing this all the time. Fixer upper homes can be a great investment…but they can also be a huge financial risk.

If you’re considering buying a fixer upper, there are certain things you need to watch out for. It’s all about finding a house with a low price tag that you can realistically repair for cheaper than how much you can raise the home’s value. Purchasing and fixing a house in poor condition can get you a nice profit, but it’s important to remember that it isn’t for everyone.

Things To Consider Before You Sign

1. Do Your Research!

With so much money on the line, it’s important to know everything you can about a fixer upper home prior to making your decision to purchase it or not. Look ahead into how the local real estate market is doing, as well as what permits you’ll need to make the repairs. The last thing you want is to buy a broken house in a failing town, only to realize you’ve got to jump through tons of red tape to get any of the construction done.

Not only does doing your research help you know what to ask when you’re talking with the realtor in charge of the sale, it also helps you uncover certain things that a realtor might not be telling you.

2. What Needs Fixing?

Just because a house has a low price and a good location doesn’t mean that it’s a good deal. It’s important to consider how extensive damages are to a home when you’re looking at a fixer upper.

Are the damages minor problems like paint chipping? Or are they major, like any problem with the structure or the foundation of the home? In most cases, it’s advised to avoid purchasing homes with major problems, as these often turn out to be more trouble than they’re worth.
It might cost you a little extra money up front, but hiring a own home inspector to check out the property is the best way to get a full picture of what you’re getting into.

3. Have A Plan To Fix It

In order to gauge the feasibility of repairs, determine which ones you will be able to do yourself and which ones you’ll have to hire a professional for. Consider all of the repair costs, including things like supplies and labor.

You don’t have to have the final number accurate down to the penny, but you should at least have a good idea of what ballpark it’s in. Whatever you do, try not to get distracted and pulled in by the low price tag, make sure your final goals are realistic first.

4. Can You Afford It?

Know how much money you’ve got available to put into the home and consider whether or not the purchase, plus all of the repairs, is actually doable. Nothing is worse than having to put repairs on pause for financial reasons, only to have more problems arise while you’re saving up more cash to throw right back at the house.

It’s also important to be aware of things like property taxes (they’ll go up as your home’s value rises) and realtor fees, as both of these things can end up affecting what you actually end up paying for the home.

5. Make It A Long-Term Investment

It might be obvious, but when you’re considering the purchase of a fixer upper you should look at it like a long term financial investment. This means you need to pay special attention to problems that may arise several years down the road, whether it’s a new repair you’ll have to make or the side effects of living in a neighborhood that’s falling apart.

You don’t want to spend your time and money on something that’s destined to fail. If the home inspector you hired seems a little iffy about something that could turn out to be another major problem, trust them. If a street is full of graffiti and all the windows are broken, find another area of town. Problems like these can make it very difficult to improve the market value of a home, regardless of how much money you’re sinking into it. Make sure your new potential home and the area it’s located in both have bright futures ahead prior to signing any papers.

6. Protect Yourself

Buying a fixer upper can be risky, but there are some precautionary steps that you can take to minimize the risk involved. One of the most common personal safety measures involves working contingencies into the deal in the event that previously unknown problems arise.

Things like mold, pests, and septic issues might be missed in initial walk-throughs, only to be noticed when you start to roll up your sleeves and work. If there’s something you’re worried about, find a way to include a little bit of insurance somewhere in the final deal you sign.
Quick Tips For The Open House

Check for structural damage.

Structural damage is generally considered both a major problem and a reason to avoid a certain home. Look for things like warped wood and termite damage every chance you get.

Check the foundation.

This one can be a little tricky to do without the proper tools, but some quick observations can help you determine if there’s a further need to investigate. For example, a wet basement can be a great indicator that there’s an issue there.

Know how old the wiring is.

Wiring is something that tends to wear out over time, often becoming a fire risk that requires replacement. Try to determine if the wiring is another thing you’ll need to replace.

How’s the roof?

Roof repairs can get expensive, so it’s important to know if that’s something you should be expecting or not prior to purchasing any home. Look for visible damage on the outside, as well as water spots on the ceiling inside as indicators for what condition it’s in.

Does the plumbing work?

Look for things like rust, leaks, and low pressure. All of these things can be an indicator that there’s a bigger problem. If you’re at an open house, don’t be shy. Try to test out the faucets, showers, and toilets for yourself.

How are the windows?

Not only can windows get expensive to replace, having ones that don’t seal properly will lead to much higher energy bills thanks to poor insulation. Be on the lookout for cracks, frailty, and possible rotting.

The Bottom Line

There’s a lot that goes into fixing a fixer upper. If you think you can take on the challenge, be prepared to spend a lot of time, effort, and money making the repairs. Fixer uppers aren’t for everyone and purchasing one before you’re ready can spell disaster.

Know exactly what you’re getting into and have a plan you can follow to turn a profit prior to buying anything. The more time and effort you put into determining whether or not you want to fix a home and then which home you should fix will probably correlate with how happy you’ll be throughout the entire process.

Try not to make a speedy decision unless you have to, otherwise you’ll run the risk of waking up several months later and realizing that you bit off much more than you could chew. Fixer uppers can definitely be a great investment, just make sure you put in the research first.