With dozens of different television shows based on the subject, it seems like just about anyone can handle a fixer upper. But before you dive right in and purchase the worst house on the block, there are some things you should consider.
Fixer uppers are a lot of work – more work than most people realize. Not only do they take a lot of time, but they can require a lot of financial investment upfront.
On the other hand, many people invest in fixer uppers because they know they can increase their equity in the home. Some people even make a career out of taking old homes and “flipping” them into fresh and nearly new abodes. Plus, with the real estate being hot right now, more people are going to be looking for fixer-uppers.
So, should you buy a fixer upper? Here are a few things to consider.
1) Location
You may have heard the saying “Location, location, location,” but it truly is one of the most important factors to consider when buying any home.
After you buy a home, there’s a lot you can change. For instance, you can paint the walls, change the windows, and adjust the landscape to your liking. But you can’t change the location. For working individuals or couples with children, finding a location in a good neighborhood within a reasonable distance to school and work is usually a top priority.
So whether you’re considering buying your own fixer upper to stay in, or to flip and then sell, consider location above all.
2) Your Time
Fixing up a house that needs extensive TLC is not for the faint of heart – or for the busy.
Renovating a home requires a significant time investment, and projects nearly always take longer than expected. If you’re crunched for time on a regular basis, you may need to consider forgoing the fixer upper, or hiring contractors to complete the work, which is usually more expensive.
3) Home Layout
You can change a lot about a home. While you can change some parts of a home’s layout, the more you change, the more expensive it will be.
Before you buy a home, take a hard look at the core of the house. What makes the house unique? The more you can work with the core layout of the home, the less money you will have to spend.
4) Number of Rooms and Baths
Of course, a house has to be practical for you and your family. Don’t overlook the number of bedrooms and bathrooms you need in order to be a functional family.
For investment purposes you may want to consider whether or not there is a possibility of adding another legal bedroom. In the US a legal bedroom needs to have a permanent closet and if it’s in the basement should have a window or door in the room that can be used in case of a fire.
5) Decide How Long You Can Live Without Repairs
When you first walk through a fixer upper with your realtor, you may be dreaming of the possibilities. While that vision is imperative for anyone undertaking a massive renovation project, it’s important for home owners to be realistic about how many renovations they can afford at once.
Just like with any major purchases, you’ll need to prioritize your renovation projects if you aren’t able to complete them all at once.
As you prioritize, you’ll have to think about what projects are the most urgent – and what projects can wait.
This might mean you have to live with an outdated bathroom or an incomplete backyard for a few years until you have enough in savings to finish the project. If you can live
6) Your Savings Rate
Every renovation requires you to save. And the bigger the renovation, the bigger the cost.
Before you buy the biggest fixer upper on the block, don’t forget to consider how much you can actually save for renovations. If you have other, more pressing savings goals, then maybe a fixer upper isn’t in the cards for you. Or, you can always start a side hustle and use the extra income to complete a few renovations.
7) Your Skill Set
If you’re planning to save money by doing home improvement projects yourself, you may want to give your skillset a second consideration. While anyone can learn how to fix up a home, if you’re learning as you go, that can slow down your progress. If you’re looking to fix up a home fast, you may want to consider hiring additional help to move the process along.
However, if you do want to brush up on your home improvement skills, there are plenty of ways to do so. For example, Home Depot often offers how-to classes and workshops, so you can learn how to complete a task in a hands-on practice. YouTube also offers how-to guides on just about anything – you just have to be patient and set aside time to actually learn.
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Would you consider buying a fixer upper? Why or why not?
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really intereasting and helpful post, thanks for sharing!
I want to get into real estate, but I don’t know if buying a fixer-upper is for me. Those houses can be bad. Renovations could take months. I don’t think I have the time for it.
Knowing what you can commit to is key! It definitely wouldn’t be a worthwhile investment if you don’t have the time to renovate it. It’s a large undertaking, but worth it if you can do it or like to do it.
My husband and I attended a conference for fixing and flipping but ultimately decided to pursue a buy-and-hold rental strategy for real estate. We started with single-family, but now have added multi-family, vacation rentals, and even a private note. We needed a more passive investment than flipping, which is a very hands-on job. We also didn’t have any specific advantage to flipping — e.g., background in building, designing, etc. So if we were to take a job, it would be better to focus on our expertise.
Wow! Sounds like you guys are busy, but that it’s a great investment!