There are lots of reasons that a potential homeowner might opt for a fixer upper instead of a move-in ready home. The biggest of these motivators tends to be the ability to buy a home below market value and create a space that reflects the homeowners’ tastes. Determining whether or not to buy a fixer upper ultimately boils down to each individual homeowner. Here are some things to reflect upon before purchasing a home in need of serious TLC so that you don’t find yourself tied to a money pit.
What Does the Home Inspector’s Report Say? A home inspection will provide you with a detailed analysis about a property, including any red flags about features of the home that need immediate attention. It’s well worth the few hundred dollars to have this done on any property you’re strongly considering the purchase of so that you understand its immediate needs and are able to determine whether it’s the right property for you.
How Much Money Do You Have? Oftentimes, you can finance home improvements with your mortgage loan. This can be a great way to get the money you need to help breathe new life into a tired home, especially when projects add to the value of the home. Just be sure to do your homework on the costs, add a little padding for unexpected budget overages. However, if immediate fixes are needed and your line of credit is tapped, you may want to forego the purchase for something that is more in line with your budget.
How Much Time Do You Have? If you’re already working full-time, coaching your child’s soccer team and leading a book club, do you really have time to renovate an entire home, doing most of the work yourself? This holds especially true if you’re on a time crunch to move in, as living in a construction zone can be rather unsettling (as can microwave dinners & cold cuts for the next 6 months…)
What’s the Neighborhood Like? One of the most important factors in determining the price of a home is its location. Is the house available at a bargain price because it’s by the city’s garbage dump or because the previous homeowners didn’t care to spend the time or money on cosmetic items such as landscaping and staining their fence and deck? The neighborhood’s crime rate is also worth researching.
What Would the Walls Say if They Could Talk? Disclosure laws vary by state and it is not always mandatory that a potential buyer be informed if the home’s owner is in prison or if a death has taken place in the home. Ways of verifying a home’s past include talking to neighbors and checking city records and police reports.
The Final Word: Buying a home can be a life-changing decision and nowhere is this truer than when buying a property in need of TLC. It’s okay to take a step back and carefully evaluate the pros and cons of the specific property you’re considering so at the end of the day, the decision you make is right for you and your family.