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The market is great for a Fixer home, but how to know which one is right?
HGTV has romanticized flipping houses. It’s easy to fall in love with this idea rooted in a noble desire to preserve history and restore homes to their intended glory. It also doesn’t hurt that many of these fixers return a handsome profit in equity for the hard work. You may even be thinking about doing this yourself! However, not every fixer-upper is a great deal, and if you’re not careful, you could end up with a money pit.
If you’re going to invest in a fixer-upper, whether to flip the house for a profit when the market is right, rent the house out, or live in it yourself, make sure that you keep these four things in mind before deciding to buy.
There’s no point in investing thousands of dollars fixing up a house in a neighborhood full of abandoned buildings and overrun by criminal activity. The same can be said for a home in a location that isn’t easily accessible. It won’t matter how beautiful the house looks after the renovations are complete if the surrounding area is unlivable and no one wants to live there. If you’re going to buy a fixer-upper, make sure it’s in a neighborhood where the buyer demand is high. Take into account school districts, accessibility to freeways and shopping these all add to the livability of a home.
When checking out a fixer-upper, pay attention to the floor plan. For example, suppose the kitchen is upstairs, and the only bathroom in the house is in the basement. In that case, you’re going to have to do some serious remodeling to remedy this – I’m talking moving pipes, ventilation, and rewiring electricity. Poor floor plans are probably not worth it since the amount of money it will take to fix them will likely negate any profit you might make. Another good thing to keep in mind is what YOU are comfortable taking on. Are the things mentioned above something you can do on your own or would these need to be hired out to professionals?
There’s a big difference between buying a house that needs a quick facelift and buying one that needs major renovations. It’s the difference between new paint, carpet, and fixtures or replacing the roof and the foundation. Unfortunately, certain repairs will cost way too much, making the house’s low price irrelevant. Your real estate agent will be your best asset in assessing where the home is priced in regard to what it could be worth when completed.
The number of bedrooms and bathrooms matters. It’s the biggest deal-breaker for any buyer. A three-bedroom and two-bathroom fixer-upper will be a lot easier to flip, rent or sell down the road than a two-bedroom and one-bathroom. Keep this in mind when looking at various fixer-upper investment properties. Bathrooms tend to be a big sticking point for many people. They are not always feasible based on the home’s location and layout, plus they cost a pretty penny to install. This is another place your professional bestie (Real Estate Agent) can help you research codes and restrictions should you find yourself needing an extra bedroom or bathroom in your possible investment property.
If any of these things I just talked about are an issue, odds are you’ll be better off not investing in that particular home. That’s where I can help you make the best decision when it comes to purchasing a home that needs a little extra love.
