A fixer upper refers to a property needing repair or renovation. However beautiful the property may look, there are many factors that the buyer must consider before purchasing. It is important to know the costs of renovation works, what renovations are necessary, and the possible future marketability of the property after renovation, among other factors.
It is a property that is ideal for someone who can afford all these factors. Whether a first-time buyer or an experienced purchaser, anyone can benefit from knowing the pros and the cons of purchasing a fixer upper.
What is a Fixer Upper?
A fixer upper is a house or apartment that is in need of repair or renovation. Simple fixes might be the cosmetic ones such as floor and paint replacement. On the other hand, a fixer upper might entail more serious repair work such as roof repair, foundation fixing, and electrical and plumbing reworking. Not all fixer uppers are repairable.
It is important to separate the cosmetic and simple repair from major repairs which cost heavily. Therefore, it is necessary to identify these two categories of repair before purchasing the property.
Pros and Cons of Buying a Fixer Upper
- Cheaper price: Fixer uppers tend to have a cheaper price tag than those properties which do not require renovation and are ready for occupancy. This means that a buyer will be able to invest some of the costs into renovating the property. Nevertheless, the total cost of purchasing the property together with renovating and maintaining it must be affordable for the intended buyer.
- Customizable: The renovating process allows customizing according to an individual’s preference. For instance, if a person desires an open plan kitchen, they can do so. Alternatively, they can decide to renovate only specific parts of the house. Families can also afford to decorate the house or apartment jointly according to their needs. For instance, if a person buys a house with a great functional layout, they can renovate their kitchen and living area according to their needs and interests.
- Investment: The renovated property can also offer great value. The improved quality of the property is due to the upgraded finishes and renovations in key components such as functional areas, baths, and kitchen. However, it will require more than just renovation works to get the expected output.
How to Pick the Perfect Fixer Upper
The above benefits are obtained by buying a perfect fixer upper. The perfect fixer upper has to be obtained through extensive research. Here are some major pointers that define a perfect fixer upper.
Inspection of Property
Before purchasing, a competent house inspector’s advice must be sought. However, there are some vital aspects that should not be overlooked in an inspection report, regardless of location and property type. The roof, foundation, electrical, and plumbing, among other factors, should be keenly examined. A competent house inspector will help detect the property’s interior, exterior, or structural aspects to see whether they are weak. It is easy to observe the cosmetic aspects. Therefore, a house inspection report will help reveal expensive hidden defects.
Research the Area
The location of a property determines its price. For future reselling, if renovation expenses are to be covered by the sale, then this factor becomes even more essential. It is critical that the future expectations of the costs of renovating and selling do not exceed the value of the property. The renovation should not cost more than the property is worth.
Budgeting
A renovation budget should include all expenses incurred during the renovating process. It should also take into consideration the extent of future repairs that may be necessary.
It is essential to separate the cost of capital expenditure (major repairs and installation of new appliances) from the other renovation costs such as painting, plastering, and minor installations, among others. Estimates must be taken from competent contractors to evaluate the cost of labor, materials, and other tangible and intangible costs that may be incurred.
Some properties will have special and unique problems which are not noticeable during the purchasing process. Consequently, a renovation budget must have provisions for such risks. It will also help when one needs additional capital after a renovation has been completed. For instance, if renovating a house, one might incur costs on renovating the kitchen. The new cabinets might have deteriorated pipelines and electrical wiring.
Most Common Errors by Homebuyers
There are many mistakes that are commonly made when people purchase a fixer upper property. These mistakes should be keenly avoided to help avoid inconveniences and additional costs. It is always essential to have an experienced contractor to help in buying a fixer upper property. Such a contractor can easily unveil the renovation costs. A home inspector should be contacted for the identification of problems, both major and minor. Additionally, it is advisable to have a financial advisor to guide them regarding the expenses to be incurred and those that may be incurred.
What are the Alternatives?
Buying a fixer upper property has its own advantages and disadvantages. Some of these circumstances may limit their success. It is ideal to purchase a fixer upper when an individual has an elaborate budget, a flexible schedule to supervise major home improvement projects, and is happy doing home renovations.
On the other hand, a ready-to-move-in property should always be the best option for people who buy real estate. The ready-for-occupancy property may be considered as a long-term investment. However, it is only appropriate if buyers are prepared to leave the property vacant or find their own solutions to the short-term needs.
In conclusion, buying a fixer upper may seem like a very complex process, but it entails numerous advantages which outweigh its disadvantages as long as extensive research has been put into the following factors:
- Inspection
- Research on the area
- Appropriate budgeting
Buying a fixer upper property also requires one’s time and effort before the actual buying process. If time is to be saved on researching and budgeting, hiring a contractor is essential. Fixer upper properties should be bought with full realization of the need for extensive repair and renovation and with adequate financial provision to achieve the best results.