Isn’t it amazing how quickly fixer uppers are whipped into shape on those home remodeling TV shows? In the span of an hour, you can watch an ugly duckling of a property transform into a gorgeous dream home. It might even make you think, “I can do that!”
But it’s important to keep in mind that flipping houses isn’t quite as easy as it looks on television. It’s one thing to buy a fixer upper, but it’s another thing entirely to actually renovate one. And while there’s no question that a property needing extensive work is going to cost a lot less than one that’s move-in ready, it’s important to fully understand what you’re getting yourself into before you buy a fixer upper. Otherwise, what may seem like a great deal could end up turning into a huge money pit.
If you’re considering buying a fixer upper, here are some things to keep in mind before finalizing the purchase:
Get a pro’s perspective. Once you locate a fixer upper, you should do your homework on the property. Unless you’re experienced with home construction and renovation projects, it would be wise to call in a few inspectors to assess the home’s overall condition. First of all, you’ll want to know if the home is structurally sound. Focus on the condition of the foundation, as well as the roof, walls, and floors. You’ll also want to evaluate the electrical, heating, and cooling systems, as well as the plumbing (or lack thereof). Inspecting the home thoroughly will help you in determining the amount of work that needs to be done on the property.
Determine what else will need attention. After evaluating the critical repairs that will need to be done, you should compile a list of the more cosmetic renovations that you’ll want to tackle. These might include painting, installing new hardwood floors or carpeting, landscaping, replacing doors and windows, upgrading kitchen appliances, remodeling a bathroom…you get the idea. Getting a full picture of the various projects involved with the rehab will help you to more accurately budget for your fixer upper.
Come up with a budget for renovations and repairs. Once you have a punch list of the renovations you’ll be tackling, do some research to estimate the cost of each individual project. And be sure to budget for contingencies as well. You never know what kinds of unexpected issues you might find once you start knocking down walls and tearing out appliances. It’s also important to know how much you can realistically afford to spend on rehabbing the property, without going into major debt. If you can’t afford the amount of renovations the property will require, you should continue your search for a more suitable fixer upper.
Know how you’ll pay for the work. Once you’ve established a budget for your fixer upper, you should determine how you’ll actually be paying for the repairs. Will you be using your savings, or are you planning to take out a loan? If you don’t have the funds readily available, you’ll want to take a look various financing options. Depending on your current financial situation, your options may include a Rehab loan, a Home Equity Loan or Line of Credit, or an FHA 203(k) loan. It’s a good idea to discuss your renovation plans with a qualified Mortgage professional before making a commitment to purchase the property. You don’t want to buy a fixer upper and then learn that you don’t qualify for the financing necessary to renovate it!
Determine who will be doing the renovations. If you’re handy around the house, then you may not need assistance with projects such as rewiring, installing new plumbing, or putting up drywall. But if you don’t have these types of skills, you’ll want to line up contractors. Before you hire anyone, be sure to get recommendations from family and friends, and read online reviews to be sure the contractor is reliable. Through websites like Angie’s List you can obtain customer reviews on various contractors in your area. Once you’ve narrowed things down to a few potential contractors, you should obtain quotes from them to ensure they’ll fit within your budget.
Figure out a timeline for renovations – and be realistic. Don’t get caught up in the HGTV hype that everything can be repaired and renovated within a few weeks. Be reasonable in your calculations and overcompensate with your timeline so you won’t be disappointed with unforeseen delays. Depending on your timeline, and how much work will need to be accomplished, you may need to find temporary living quarters. Whether that be finding an apartment, moving in with your parents for a period of time, or living in one end of the fixer upper while you finish repairs on the other section, you should have a plan in place.
By doing as much research as possible before committing to a fixer upper, you’ll have a greater chance of being successful with your renovation goals. A little preparation and budgeting can go a long way toward getting you into your dream home!
But it’s important to keep in mind that flipping houses isn’t quite as easy as it looks on television. It’s one thing to buy a fixer upper, but it’s another thing entirely to actually renovate one. And while there’s no question that a property needing extensive work is going to cost a lot less than one that’s move-in ready, it’s important to fully understand what you’re getting yourself into before you buy a fixer upper. Otherwise, what may seem like a great deal could end up turning into a huge money pit.
If you’re considering buying a fixer upper, here are some things to keep in mind before finalizing the purchase:
Get a pro’s perspective. Once you locate a fixer upper, you should do your homework on the property. Unless you’re experienced with home construction and renovation projects, it would be wise to call in a few inspectors to assess the home’s overall condition. First of all, you’ll want to know if the home is structurally sound. Focus on the condition of the foundation, as well as the roof, walls, and floors. You’ll also want to evaluate the electrical, heating, and cooling systems, as well as the plumbing (or lack thereof). Inspecting the home thoroughly will help you in determining the amount of work that needs to be done on the property.
Determine what else will need attention. After evaluating the critical repairs that will need to be done, you should compile a list of the more cosmetic renovations that you’ll want to tackle. These might include painting, installing new hardwood floors or carpeting, landscaping, replacing doors and windows, upgrading kitchen appliances, remodeling a bathroom…you get the idea. Getting a full picture of the various projects involved with the rehab will help you to more accurately budget for your fixer upper.
Come up with a budget for renovations and repairs. Once you have a punch list of the renovations you’ll be tackling, do some research to estimate the cost of each individual project. And be sure to budget for contingencies as well. You never know what kinds of unexpected issues you might find once you start knocking down walls and tearing out appliances. It’s also important to know how much you can realistically afford to spend on rehabbing the property, without going into major debt. If you can’t afford the amount of renovations the property will require, you should continue your search for a more suitable fixer upper.
Know how you’ll pay for the work. Once you’ve established a budget for your fixer upper, you should determine how you’ll actually be paying for the repairs. Will you be using your savings, or are you planning to take out a loan? If you don’t have the funds readily available, you’ll want to take a look various financing options. Depending on your current financial situation, your options may include a Rehab loan, a Home Equity Loan or Line of Credit, or an FHA 203(k) loan. It’s a good idea to discuss your renovation plans with a qualified Mortgage professional before making a commitment to purchase the property. You don’t want to buy a fixer upper and then learn that you don’t qualify for the financing necessary to renovate it!
Determine who will be doing the renovations. If you’re handy around the house, then you may not need assistance with projects such as rewiring, installing new plumbing, or putting up drywall. But if you don’t have these types of skills, you’ll want to line up contractors. Before you hire anyone, be sure to get recommendations from family and friends, and read online reviews to be sure the contractor is reliable. Through websites like Angie’s List you can obtain customer reviews on various contractors in your area. Once you’ve narrowed things down to a few potential contractors, you should obtain quotes from them to ensure they’ll fit within your budget.
Figure out a timeline for renovations – and be realistic. Don’t get caught up in the HGTV hype that everything can be repaired and renovated within a few weeks. Be reasonable in your calculations and overcompensate with your timeline so you won’t be disappointed with unforeseen delays. Depending on your timeline, and how much work will need to be accomplished, you may need to find temporary living quarters. Whether that be finding an apartment, moving in with your parents for a period of time, or living in one end of the fixer upper while you finish repairs on the other section, you should have a plan in place.
By doing as much research as possible before committing to a fixer upper, you’ll have a greater chance of being successful with your renovation goals. A little preparation and budgeting can go a long way toward getting you into your dream home!