Fixer-upper: an affordable home in need ofrenovations
So, you're contemplating the pros and cons ofpurchasing a fixer-upper versus a more pricey home that'sready-to-go without any renovations. You have probably heard thatrenovations are a lot of work, but how do you know if it'sworth the reward? To make sure you're not biting off morethan you can chew, here are a few crucial questions you need toconsider before deciding whether or not a fixer-upper is right foryou.
How does your renovation budget compare to howmuch work is needed?
One of the main reasons people purchase fixer-uppersis to save money, but ironically many people end up going overbudget. This is why your first step will be to take the cost of thehouse and add on how much the renovations will cost. The renovationestimate should be carefully calculated based on the needs of thespecific house plus the services needed to complete the work. Somehouses will need more work than others, leaving less room in thepurchasing budget and visa versa. If you have ever watched any kindof house-flipping or renovation show, you will notice thatsomething always goes wrong adding additional costs, which is whyit is important to include a contingency plan and have some moneyset aside for any unfortunate surprises. This is especially truefor older houses. If you plan on tearing down walls and messingwith the structure of the home, be sure to leave extra room in yourbudget.
Do you plan on hiring workers or doing ityourself?
Along with the materials, renovation also requires thecosts of labor. You will most likely need a home inspector,contractor, plumber, and electrician. Complex projects may evenrequire architects and designers. Even if you decide to go the˜do-it-yourself' route, you will need to call in anexpert every once in a while. Without an understanding of thestructure of the house you may put yourself and your investment indanger. For example, you cannot go tearing down walls withoutunderstanding which ones are load-bearing, keeping the homestructurally sound. Also, construction must be done according tothe laws and neighborhood rules. If construction is not up to codeyou could be fined or even required to change it back. This is whyeven if you plan on doing a lot of the work yourself, it isfinancially worth it to hire the professionals when needed. Thesecosts will add up, so make sure to include this in yourbudget.
Are you able to pay two mortgages or do youhave somewhere else to stay?
During the renovations, where are you going to live?If you choose to stay in your current home, you need to be preparedto pay for two mortgages. Many people decide to stay with family orfriends, which is a more cost-effective solution. However, be surethat the person you are staying with knows the duration of theproject and will be willing to let you stay if the project scheduleis extended. If you choose to go ahead and move into the home, makesure it is safe. Living in a house undergoing renovations is nottypically a safe plan if you have kids or pets. Whatever yoursleeping arrangements are, be prepared and make a plan for if theproject goes on longer than expected.
Is there a strict deadline for the completionof the project?
If you have a strict deadline, such as a babyon-the-way or no place to stay after a certain date, you may wantto reconsider purchasing a fixer-upper, or at least give yourself afew extra months in the schedule. Renovations take time and thereis rarely a renovation with no surprises. Make sure you do notstress yourself out by being on a strict, inflexible timeline. Planfor success by giving yourself a few extra months to make sureeverything is taken care of. If you finish early- great!
After considering all of these questions you shouldhave a better idea if you are ready for a fixer-upper. There are no˜right or wrong' answers. Write out your renovationplan, create a budget and schedule, and look at the amount of timeand energy it will take. If you are happy with your plan- go forit! Purchasing a fixer-upper can be a great investment if donecorrectly. Just be sure you are prepared and understand thatit's no easy task!
So, you're contemplating the pros and cons of purchasing a fixer-upper versus a more pricey home that's ready-to-go without any renovations. You have probably heard that renovations are a lot of work, but how do you know if it's worth the reward? To make sure you're not biting off more than you can chew, here are a few crucial questions you need to consider before deciding whether or not a fixer-upper is right for you.
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