In the world of real estate, a fixer-upper is a term used for an old house that needs some serious renovation work. We don’t mean redoing the paint but fixing the floors or drainage system.
Many times, it is possible to move in the house while the repair is still going on. A fixer-upper is a tricky deal where you might end up saving a fair amount of money. Most of the time, you’ll find these old homes under the ‘potential homes’ or ‘renovator’s delight’ listing column.
These houses can prove to be profitable and can be bought under the market value. However, investing in the fixer-upper requires a lot of careful planning so that you don’t end up spending more on the house repair than the saving you’ve made.
In this article we’ve listed down the top eight considerations you should keep in mind before purchasing an upper fixer.
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Time Duration
As you might know, renovation projects end up taking more time than you calculate. So it is important to realistically estimate the amount of time the renovation task will take. You should also decide whether it is worth waiting for such a long time.
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Type of Renovation Required
Before purchasing the property, you need to hire a professional so that he can thoroughly examine the house. After inspecting the house he will determine whether the property requires structural or cosmetic renovations. While cosmetic renovations generally take up less time and cost, structural renovations are expensive and require extensive work. So it is sensible to consider whether it will be worth it or not.
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Structural issues
Any renovation in the structural design of the house will blow up the cost of repairing the house. Thus you will end up with a devastating investment plan than a fixer-upper. So it is essential to figure out the structural issues in the house beforehand. A successful way to get the house thoroughly checked is to hire a pest and building inspector. If any structural issues exist in the property, you should proceed with caution and also negotiate the price of the purchase.
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Restrictions imposed by the council
It is important to make sure that the council has not imposed any restrictions in the region where you’re planning to buy a fixer-upper. It is also important to consult a council town planner to make sure the fixer-upper you are planning to purchase does not have a resale restriction. There is no point in purchasing an upper fixer if there is a contract of sale. You should also make sure that the trees within the premises do not pose any danger to the property. Some species may even require the council’s permission before uprooting.
Renovation Budget
After examining the property it is important to make a realistic estimate of the budget. So you can contact a builder or a professional involved in this kind of work. Do not try to do it yourself as you may end up underestimating the budget.
At last, it is also essential to question whether the cost of renovation is within your budget.
Practical Costs
It is also important to consider the practical cost of living after you’ll purchase a fixer-upper. For instance, where you’ll stay during the renovation period? If you’ve sold your previous home, you should also add up the cost of rent for a stay during this duration. This will rise the budget significantly.
Emotional cost
Buying a fixer-upper that needs a significant amount of repair can add up to your mental stress. Increased budget can also add up to it. So it is extremely important to set up a good relationship with your builder and have space for transparency and communication during the renovation process.
Contingencies
Lastly, even after foolproof planning and communicating with the builder, you must expect things to go wrong anytime. The budget can expand and even unplanned work can come up. Hence it is recommended to set up a contingency fund to minimize any stress in such a situation. It is recommended to set aside 10% of the total budget to deal with any unforeseen circumstances.
Conclusion
These are the main points that you need to contemplate before buying an upper fixer. An upper fixer can prove to be a perfect way of investment and you will end up getting wonderful returns. On the other hand, it is a huge commitment to make and can prove to be financially as well as emotionally draining. Here’s it’s important to weigh both sides before making any leap.
