Most people have seen at least a few television shows about fixer-uppers. These shows generally transform undesirable, outdated homes that may have significant defects, and they turn them into dream homes. By doing so, they often build a large financial profit into the home through increased property value. This may sound like an amazing opportunity that you want to cash in on, but there are a few things to consider before you decide if a fixer-upper is the right type of property for you to consider.
Your Financial Situation
One of the reasons why a fixer-upper may be so appealing is because of the financial upside. These homes are generally sold well below market value. By bringing the property condition and style up to or above the same level as other homes in the area, you may increase property value to a comparable level. However, it may cost tens of thousands of dollars or more to improve some properties sufficiently. You will need to estimate the cost of the repairs and improvements needed, and you can then compare that to the estimated future property value. By doing so, you can determine if you can afford to make the necessary repairs and if the upside is as substantial as you thought it was initially.
You may outsource all aspects of a home renovation to professionals, but you may enjoy greater profits when you do at least some of the work yourself. The quality and condition of your renovated home will be based on the quality of work that you and your contractors are able to do. You should accurately assess your realistic ability to complete many types of projects before you finalize plans to purchase a fixer-upper.
If you intend to do a substantial amount of work on your own, you should assess your schedule. Keep in mind that professional contractors who have significant expertise and can work on a project full-time may require several weeks or more to complete the work. If you are only able to work on a project on the weekends, it may take you months to complete the work. This is time when you may not be able to move into the home or to live comfortably in the space.
Your Personal Life
One final factor to consider before you decide to buy a fixer-upper is your personal life. A fixer-upper can consume your money, time and energy for months. You may need to live in a construction zone for this period of time. If you have young children or other special responsibilities in your personal life, a fixer-upper may be a larger project than what you are willing to take on.
A fixer-upper can potentially yield a tremendous profit for you. It may also give you the ability to create a space that lives up to your expectations in terms of layout and style. However, there are many factors that must be considered before you decide if this is the right real estate option for you. Analyze these factors honestly and thoroughly before you finalize your decision.