LIFEHACKS

7 Things To Consider Before Buying A Fixer-Upper

Date January 17, 2018 17:42

If buying a house is your thing and you enjoy tinkering, a fixer-upper may be particularly appealing. Whether the unit is in a rundown neighborhood or situated in some upscale community, one thing remains constant. Pricing for fixer-uppers does not rely much on the real estate climate at any given time.

The major reason is that your average fixer-upper has a problem or two that make it harder to be valued competitively. Other houses in a better state are more likely to get attention and thus, be priced accordingly.

Still, buying one is not a bad idea. It does help a lot to be sure of what you want to do with the house after the purchase. Fixer-uppers that require only minimal cosmetic enhancements are some of the best buys. You get to spend a lot less touching up paint or fixing drywall than replacing fittings and fixture.

Why buy?

1. They cost less.

Most fixer-uppers cost considerably less to purchase than a house of similar size. And pricing is largely dependent on how much the house has been devalued in lieu estimated cost of renovation required to get it back in shape.

Also, there is no math to determine how exactly much renovations cost. This is largely dependent on the buyer and the plans for the house. Is the flip going to happen because the unit is to be resold? Or is the buyer flipping it for personal use?

2. You can sell them for more.

The value of flipped houses almost always goes up; in some cases even higher than a property of the same size.

3. Learn how to flip.

If you are new to the game, buying a fixer-upper gives you an awesome opportunity to learn all about flipping houses. Even if you are not directly involved in construction, you can learn a lot from supervision.

Reasons not to buy.

4. Certifications can bury you.

You may consider having inspections done on the property before buying but that poses a major challenge. Sometimes, a seller may not be open to footing expenses for this. And considering there are several areas involved, you may be in for a major hassle.

5. Undeclared damage.

Some sellers may not reveal the true extent of damage in a fixer-upper. Also, you may be shocked to find out that the deal was not as good as it looked on the surface.

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6. Cost of hiring hands.

If you are not handy with tools, you will have to part with more money to hire workers. Furthermore, in cases where renovations are more than cosmetic, engaging skilled labor could shoot up costs.

Also if your project is not large, you can charge your credit card. Despite the high interest rates, you are not required to pay for appraisal or origination fees.

In conclusion, it is always a good idea to seek financial advice before embarking on such a project. Whether you are buying a fixer-upper with plans to renovate and move into, or thinking about flipping it, be sure that your plan is watertight before going in.

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The advice provided in this article is for informational purposes only. Some of the suggestions presented in this article may be harmful to health or may be dangerous. The editorial board does not guarantee any results and does not bear any responsibility for harm or other consequences that may be caused by using the information provided in the article.