Fixer uppers are all the rage it would seem if you’re an avid watcher of TV home improvement shows. You’ve undoubtedly seen all the magic home decorators can do to even the worst of homes with what seems like minimal effort and a minuscule budget.
These scenarios might have you wondering whether or not a fixer upper is the right financial choice for you as you look to buy a home in 2017.
The reality is, there’s a reason that outside of television-based decorating shows, fixer uppers are hard to sell.
They’re extremely expensive in many cases, and there are a lot of things to take into account before making the leap and purchasing one.
The following are some of the top financial considerations to keep in mind if you’re weighing the possibility of purchasing a house in need of work.
Think About The Neighborhood
When you’re looking at homes to buy, particularly if you’re not ruling out fixer uppers, you need to take the neighborhood into serious consideration.
First, is it a bad house in a good neighborhood? If so, it can be a smart financial decision to buy it, if putting in the work would elevate it to the level of the other homes in the area. You might end up making money and maybe a lot of it if you decide to sell.
On the other hand, would doing a renovation on the home price it out of your neighborhood? Would the end result be so much nicer than the surrounding homes that you’d lose money?
Price Out Repairs Before Making An Offer
People are often surprised at just how much home renovations can cost, particularly if they’ve never done them before. If you’re thinking about a fixer upper, don’t wait until after the closing to have professionals come out and give you estimates.
Do it before you make an offer, so that you’ll ensure that the work you want to have done isn’t going to be way out of your reach.
In addition to the estimates the professionals give you, make sure you also include the cost of materials and add anywhere from 10 to 20% extra for those unforeseen situations that always come up with home remodels.
Is It Something You Want?
You’re mesmerized by the thought of having an entirely new home in six weeks just like what happens on your favorite shows, but unfortunately, that’s not likely to be the case.
Even small home renovation projects are time-consuming, whether you’re doing them yourself or you’re hiring someone. There are always bumps along the way, and if you work full time and you’re planning a lot of DIY projects, it’s going to take you even longer.
You have to give serious thought as to whether or not that’s something you want for your life. Do you want to live in a construction zone for months? Do you have young children? Do you have the time for DIY projects?
A fixer-upper can be a great opportunity, but you need to have a realistic budget in mind for repairs, you need to find a home in the right neighborhood, and you need to ensure you have the right mindset for taking on that level of work.