If you enjoy houses with a little character, you might be the perfect candidate for a fixer-upper. This is an area with a few minefields, however. So before your eyes get glazed over when you see that fabulous Victorian house, do some practical evaluation and get the advice of a few professionals. Your area of interest will usually include several fixer-upper homes for sale. Know the caveats before taking the leap.
How Much Fixing-Up Can You Handle?
There are two considerations to this question. First, can you afford it? And second, how much can or do you want to do yourself? A fixer-upper can range from a house that needs a few minor repairs and a cosmetic facelift to a house that requires substantial reconstruction.
Your first step to evaluating the cost is to hire an inspector. Make sure he’s got building experience–especially in the era of houses like the one you’re looking at–and has an honest track record of telling-all. You need to know if the foundation is about to fall in or if the entire plumbing system needs to be redone. Since repairs usually expand instead of contract, add about 20% to the inspector’s final estimate. The key here is to overestimate your cost. Then, secure the financing that will cover both the house purchase and the repairs and make sure the monthly payments are within your budget. Your mortgage company won’t be willing to finance a loan for more than the house is worth so you will need to explore other options for financing repairs.
If you’re a do-it-yourselfer, consider how much construction experience you really have and how much time you can devote to fixing a house. Doing the fixing-up yourself requires eternal problem-solving skills and supreme patience. Additionally, are you willing to sacrifice your evenings and weekends to work on your house?
Can You Handle Living in a Construction Zone?
Remodeling and renovation can drag on for months or even years, depending on your cash flow and time. Do you and your family have the patience to live in inconvenient situations for a period of time? These periods of time will usually stretch into longer time-frames than originally expected. Are your relationships strong enough to handle the added strain on your finances and time? Is every person in the family willing to be a team player? If your answer to any of these questions is no, consider arranging for alternative living arrangements while the remodel is taking place. This could take the form of renting an apartment or living in one part of the house while the other part is being fixed.
Be aware also that fixing up a house often ignites strong opinions and emotional attachments. Do you and your spouse have a similar vision for the house? Are you able to reach compromises fairly easily?
Do You Plan to Sell in a Few Years?
If you’re planning to sell in a few years–or even if you’re not–it’s wise to consider the neighborhood. As some eager home-buyers have discovered, turning a run-down house in a modest neighborhood into an upscale mini mansion could negatively impact your future selling opportunities. That’s because people who want to buy ready-made homes for sale are usually also looking for a neighborhood to match. Opt for buying the ugliest house in the neighborhood and bringing it up to scale.
When you’re looking at fixer-upper homes for sale, it’s always wise to count the cost–in resources, relationships, and future selling plans. Then, you can focus on the real reward–creating your dream home from a less-than-perfect house.