How to Buy a Fixer-Upper
Many first-time homebuyers may not be able to afford a brand new, move-in ready house. A better option may be to buy a fixer-upper and start the restoration process. There are many easy ways to find a fixer-upper that won’t break the bank. We don’t want your fixer-upper to become a financial burden so here’s how to spot a good one:
Factor in the Home’s Age
Considering the home’s age will help you make a wise decision. The older the home, the harder it may be to find authentic parts for restoration. Older homes may also come with financial headaches like asbestos or lead paint which need to be addressed by a professional. The newer the home, the more opportunity to update the home yourself.
Get the Home Inspected
Never forego a home inspection, especially on a fixer-upper. Many fixer-upper houses are sold “as-is” meaning the seller may not pay for cosmetic or structural fixes. As a result, the amount of work required should be reflected in as-is home prices, or you may want to skip the home if it’s not worth the hassle. An inspection is the best way to know whether or not a fixer-upper is within your abilities to improve.
Focus on the Home’s Foundation and Structure
It’s best to find a home with a sound foundation and good structural integrity. Foundational issues are some of the most expensive problems to fix. Structural problems require professionals and cannot be done by yourself. Water damage, warping, cracking, and mold are all common foundational problems, so it’s important to walk away if there are too many problems with the foundation and structure of the home. Double check the home’s past and future flooding issues with FEMA’s Flood Map.
Calculate and Analyze Your ROI
Find a home that’s not going to require too much renovation. If the home needs too much work, it may not be the ideal investment. A simple way to calculate your potential return on investment is to add up the total cost of renovation and subtract that from the potential sale value of the home. It’s better to calculate and analyze your ROI before you buy the house.
As always, the most important calculation is whether you can afford your mortgage. Use our mortgage calculator to find out.
Don’t Forget About These Added Costs
If you’re planning to gut the entire place, remember that not only demolition will cost you, but hauling away the debris will also be an added cost. Be aware that other necessities, like working with a contractor, may add to your total renovation cost, so factor in those costs. Finally, make sure the location of your fixer-upper is one that’s stable or going to see an increase in home value in the future. It’s best to buy a diamond-in-the-rough that’s going to become more valuable. There are plenty out there!
If you have questions about buying a fixer-upper, contact us!Buying a home, First time homebuyers, Fixer, Fixer Upper, home buyer, Home Financing, homebuyers, homebuying, Marriage, Millennial Homebuyer, Unmarried, Upper