Run-down old houses can be a tempting proposition for house hunters. You can envision the finished product in your mind’s eye and you probably can’t wait to dig in and get busy creating a beautifully restored home. This is one decision you'll want to think over carefully. Making the wrong choice can result in years of paying for the unforeseen complications that can arise if the basics aren’t in place. This isn’t something you want to find out after the fact, so read on to learn what to look for before investing in a fixer upper.
This will be the most important element when deciding whether or not a house that needs a lot of work is right for you. The first step is getting a thorough inspection and figuring out exactly where the biggest problems lie so you can crunch the numbers. If the cost of the renovation is not going to be offset by the increased value of the home, it is probably not worth the headache.
When making your estimate of the total cost of the project, in addition to the side of unexpected costs, pad the renovation budget by about 10% for surprise problems and added features/improvements that you absolutely must have throughout the course of the project.
Experts recommend steering clear of houses that have structural damage, because the cost of repairing this kind of issue can easily outstrip any gain in value. Foundation damage is particularly difficult to correct and requires extensive, and expensive, work. If the basement is wet or there are visible cracks in the foundation, walk away.
Roofs typically need to be replaced every 20 to 30 years, so it’s crucial that you have proper information on the age of the roof so that you know whether to include this repair in your total cost estimate. The same holds true for furnaces – find out the age and decide whether this needs to go in the replace list.
Be Prepared to Pitch In
For the most part, a fixer upper is only worth the investment if you plan to do some or most of the fixing up yourself. Consider whether you may be able to handle electrical system or plumbing updates, and if the answer is no, work these costs into your renovation estimate.
Installing cabinets, putting up drywall, painting, and other basic cosmetic improvements are fairly reasonable endeavors for most DIY’ers, so you will potentially save quite a bit of money in these areas.
Are you prepared to live in a construction zone? If not, does the budget allow for a small apartment or other temporary living solution while the work is being done? Also consider the time investment – whether you’re doing the work yourself or hiring a contractor, you’ll need to be able to spend plenty of time onsite. This means that you’ll have to decide whether you can take vacation time from work or otherwise manage the supervision of the project.
Another factor that people sometimes forget to take into account is the relationship stress that’s bound to come into play during a major home renovation project. Make sure you and your family are totally on board every step of the way, and that you have a contingency plan in place for dealing with any disagreements as potential complications that may develop.
The Bottom Line
Once you’ve considered the problems that may be involved in buying a fixer upper – financial, emotional, and practical – you can make a logical decision as to whether this home buying option is right for you.
DISCLAIMER: Readers should keep in mind that any accounts of renovation presented in this blog are written accounts of events taking place at individual homes, and are not necessarily endorsements of do-it-yourself home improvement. You proceed at your own risk if you attempt to replicate any activities described here.
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