You’ve always had a dream of buying a fixer-upper house. Nothing seems more satisfying than buying a house that needs work, and then doing it all yourself to make it beautiful. And more than that, you are also making an investment that will only grow with time.
But before you buy a house to flip, there are a few crucial things to know to make sure you get the bang for your buck. Keep reading to make sure your investment doesn’t flop!
1. Know Your Budget
When you are looking for how two choose a fixer-upper, you first need to know that most fixer-upper houses come with about an 8% discount. Knowing that math allows you to budget around it to make sure you are choosing the right investment.
For instance, if you buy a house for $100,000, you saved $8,000 if it was a fixer-upper. However, if you have to put in more money than $8,000 to fix it, then you aren’t saving anything and the investment isn’t worth it.
2. Add More to the Budget
Once you have a budget set and know about how much you are willing to spend on renovations, add some more. There are always surprise costs and issues that you will run into as you fix the home, so adding the costs in beforehand will help you budget even more.
3. Get the Inspection
It may be no surprise that if you’re purchasing a fixer-upper home that there may be some issues. And you definitely need to get the home inspected before the purchase goes through.
But because it is probably older or needs some renovations, know that there are probably going to be some other issues that you run into. If there are too many during the inspection, you may want to rethink your purchase and keep looking.
4. Know When to Hire Professional Help
When it comes to buying a fixer-upper property, there are some things that you can easily do yourself, like changing the backsplash in the kitchen or painting the guest bathroom a different color.
But there are some things, like plumbing and electrical setups that you will need to outsource for. When thinking of the pros and cons of buying a fixer-upper house, be sure to make a list of what needs to be fixed in the house so you are aware of what professional help you’ll need. Since this will dip into your budget, knowing this ahead of time is crucial to making an investment on the property.
If you’re thinking you may need help, click here.
5. Life Will Be Messy
If your dream is to renovate a home, it can be easy to overlook the everyday lifestyle that you will be living. Instead of having the everyday luxuries that you would have in a home that is completely renovated, you may find yourself getting frustrated.
The downstairs bathroom may be ripped up and unusable at the moment, or the kitchen flooring may be nonexistent. Construction tools are probably lying all around the house.
Your life will not seem “neat” when going through a renovation, so as long as you know this beforehand, you’ll thrive!
6. Think About the Location
When buying a fixer-upper house, you want to buy one in an area that people would actually want to buy in after it is fixed.
Buying a house to fix in the middle of nowhere is probably not going to pay off in the long run. But buying a house in a bustling city or suburb of a city that needs a few tweaks to it will definitely get you the investment you wanted!
It’s all about the negotiation. When buying a fixer-upper house, never give the exact amount that the price is listed at. Instead, try to negotiate a bit so that you are making the most out of your investment that you can.
You should also make clear what contingencies are a part of the purchase so that if something goes wrong, you can back off without being locked into something that will be disastrous in the end.
8. Figure Out the Payment
There are many different ways that you can pay for the home itself. You just need to know which route you want to go in. The FHA offers loans, but the VA also offers renovation loans. In addition to those, there are also several other options out there that you can choose from
Be sure to research to choose one that will help you the most!
9. Research Before Purchasing Supplies
When it comes to finally doing the renovation, make sure that you don’t just buy the first tool you see or the first wood you see. Make sure to research which materials will work, but for a cheaper price. Exhaust all of your options between different stores so that you know you’re getting the cheapest option.
10. Be Flexible
You may have a timeline in mind when you buy a fixer-upper house and start renovating. But the key to avoiding frustration and brushing over issues is to be flexible with the build.
There will be problems and it will most likely go slower than you anticipate. But that’s normal! Just give it time.
Pro Tips for Buying a Fixer-Upper House
Buying a fixer-upper house can be a very exciting investment and time in your life! But doing it wrong can lead to some disastrous outputs and a waste of money (and potential loss).
By following these tips, you’ll find yourself in a much better position when thinking about the pros and cons of buying a fixer-upper house. And if you enjoyed these tips, be sure to check out some others on our blog!