Taking the Plunge on a “Fixer-Upper”

It’s difficult not to be seduced by the amazing house makeovers so prevalent on television these days. Buyers find an adorable fixer-upper in a great location, and set out to make it their dream home. But, on a limited budget, it becomes even more important to know what to look for before taking the plunge on a house that needs a lot of work.

Older homes often have underlying safety and construction issues, and you can save a lot of time and money by planning for them. It’s critical to get inspections done on the home to make sure you are not purchasing a money pit. Plan ahead and work with professionals that can help you with cost estimates, before committing to a property. Make sure you ask the right questions to make sure the work is worth it. Any house can be made to look beautiful, but by working with the right experts, you can ensure the property you choose is actually worth it, in the end.

Below is a checklist of items to consider, before buying a fixer-upper.

• What sort of things can you do yourself with minimal experience and minimal cash?
• What things can you not do yourself?
• What are the huge hidden expenses (ie. old roof, broken water heater, unstable foundation)?
• Is the basement/crawl space dry?
• Are there plumbing leaks?
• Is the home properly wired?
• Do doors and windows need replaced?
• What is the condition of the heat system?
• Do you want to live in a house under construction?
• How long will the repairs take?
• Can you repurpose any of the materials?

MoneyWork hard to stretch your dollar. If you can’t afford custom kitchen cabinets, then buy prefabricated cabinets. If you don’t have enough money budgeted for stone (ie. granite) countertops, there are many other countertop types that look like stone. Lighting is another way to add value. A well-lit room feels larger and more inviting. Fresh paint and new flooring are keys to improving a fixer-upper.

Be sure to ask your real estate agent to do a market analysis of what the home will be worth once the improvements have been made. This will give you a better idea in determining if the cost will be worth it. Take a look at other renovated homes to see what buyers are expecting. This can save you from doing too many unnecessary renovations.

Taking the plunge on a fixer upper can be an exciting and enjoyable process. It’s a great way for buyers to break into the market by buying a home that needs work and adding some “sweat equity” to increase value.