Buying a house that needs work done before you can live in it or to sell it is an interesting proposition for many people. And, in some cases, it can actually work. If you’re savvy about buying properties in general, you could find great deals on the market if you’re willing to make some repairs. You should know, however, that these properties can present serious risks, and you could end up with something that will cost you much more than you expect. Let’s take a look at some of the things you’ll need to consider before you commit to buying a fixer-upper.
Who’s Going to do the Work?
If you can perform the repairs needed to bring the home up to par yourself, then getting a fixer-upper is much less risky. But, if you intend to hire people to do the work for you, you have to make sure that the costs will not eat into your margins or exceed them. This is why you should make a full inventory of the repairs that might need to be done, and don’t pick a property that has some elaborate issues that would require you to hire a constructor or a contractor.
Small jobs can be performed quite cheaply by handymen in your area, so look for a handyman near me and ask for quotes for different jobs. After you run your search for a handyman near me, compare their prices and see how much experience they have performing the kind of job that you want. That will allow you to make big savings and get professional results.
Know Which Issues are Worth Repairing
Know that you’re not obligated to completely renovate a fixer-upper if your goal is to make a quick profit. You could focus on what’s important and realise a profit almost instantly. If the house has roofing issues, for instance, but has other things going on, you could concentrate on the roof first and only do cosmetic work around the house. Depending on the asking price for the property, you could make a lot of money and use the new roof as a selling point.
On the other hand, you can also find properties that look very bad but could be fixed up relatively cheaply. A neglected home can look horrible at first glance, but if it doesn’t have major plumbing, foundation, irrigation, or electrical issues, then there’s a good chance that you could have most of the cosmetic work done for cheap or do some or all of it yourself. These are the types of properties that will give you the most bang for your buck.
It Could be Better to Demolish and Rebuild
If you come across a home that looks in very bad shape, but the price is low, you should consider whether demolishing and building something new on top of the lot could make sense. Depending on the rules in your area, you could transform a single-home unit into a multi-unit property. This could give you a place to stay and allow you to make money from tenants. So, look at how much the whole project would cost you, and the possible revenue you could make over time with the property.
Work with More Than One Inspector
If you’re going to be serious about buying fixer-uppers, you need to have the number of at least three inspectors in your contacts. You cannot rely on the opinion of one person only, and one inspector might see something that another one won’t. Also, make sure that there’s an inspection contingency clause in the purchase contract. This will allow you to withdraw your offer if you see something you don’t like.
Be Smart with Renovations
If the issues with the house are largely cosmetic, you need to learn about ways to make different adjustments without spending too much money. Try to use veneers wherever you can instead of hard materials. If you’re going to be adding details like crown moulding, then go for less expensive but still beautiful options like foam. If you are going to replace floors, consider cheaper options like LVT or laminate. And if you can get anything reclaimed or recycled, go for it.
Don’t be Afraid of Structural Work
Some people will automatically write off homes that have structural issues, but you shouldn’t. There could still be some good deals to be had, but the asking price has to be worth the risk. You should also hire a structural engineer before you consider buying it.
Buying fixer-uppers can be a great way to make money through flipping and a great way to get a nice place to live at a discount. Be careful when looking at these types of properties and learn how to spot a good deal before you start looking at listings.
