Are you considering buying a fixer upper, making an upfront investment in a brand-new property? Buying a fixer upper can be a risky task by new investors, Ocala Real Estate Broker, Frederick Franks put together a very informative article that you can read to better understand the process of buying a fixer upper.
Who can consider a Fixer Upper?
Acquiring a property to make your dream abode is surely on the bucket list of many. A lot of planning, efforts, and money go into the decision. Hence, we are often attracted to discounted deals and bargain buys, especially when it comes to buying a fixer upper. These lucrative deals are hard to resist, and you can also make it an ideal investment.
Fixer Uppers are for those who can afford to spare the time and also put in a lot of effort in renovating the house. It is no easy task, though; you should be prepared to set aside more time and money for the renovation and to meet your temporary residence requirements. You should also have an alternative place to stay until you are done with the restructuring and cosmetic upgrades to make the house livable.
So, if you are a die-hard DIY fan and also have the patience to transform brick and mortar into great living spaces, then the fixer uppers are a great choice. People who do not want to take up the headaches of huge mortgages but want to own a livable home can opt for this form of housing arrangement. It is not for those faint-heated, so prep up if you are considering buying a fixer upper.
Some Prerequisites before settling for a Fixer Upper
Fixer upper homes usually sell for a lesser price per square foot than the one that is ready to move in or brand new. This is the same reason why first-time buyers consider these as an easier option to get ownership of a home. Even before you start hunting, educate your mind about the complications that are to follow; if not, you might get stressed out easily.
The decision to invest in a home that needs quite a bit of renovation is something that has to be well planned. Consider an in-depth evaluation of the following points concerning your purchase. Also, be aware of certain deal-breakers that you should look out while going for a fixer upper. Do not fall for a cheaper option just because it has a lot of restructuring and renovation; be sure you check the locality before zeroing in the property.
We help you with this task by giving you a brief idea as to what factors to consider while buying a fixer upper.
Work up the costs of renovation – If you already got the quote of the property, try estimating all the expenses that you are likely to incur in renovating the house. Always keep a provision for the extra and unforeseen expenses. Do a cost-benefit analysis of buying a new home versus a fixer upper.
Cut out the DIY part of the renovation – Identify some of the less complex tasks that you can do it by yourself, like painting the walls, mending the garden, etc. What you have to note is to add the costs of the supplies with your estimates. Give a thought to the time it would require if you are doing it by yourself.
Factor Permit Costs – It is advisable to get your permits for the renovation work so that it would not hinder the process of re-sale in the future. Getting permits can be a cumbersome and tiring process. However, it is worth to sort things in black and white as you will be investing a lot of your hard-earned money into this.
Get a professional to do the pricing on structural work – If the fixer upper requires extensive structural renovation, it is better to get a professional do it for you. This way, you can be sure and confident about the costs that you might incur to renovate the house. Get your estimates from the expert in writing before you finalize the deal. Also, be sure you are getting a good discount if there are major renovations to be done.
Financing costs – Make adequate arrangements to finance the deal. Your savings might not be enough to fund the renovation, so better get the loans pre-approved for the purchase as well as home improvement. You can also try the special finance arrangements that are intended to help home owners meet the restructuring and renovation costs.
Calculate the fair value of the renovated property – consider the costs and add it to the total price you are to pay for the house. Compare it with similar properties in the locality to make sure you are getting a fair deal. If renovation is going to eat up a major chunk of your budget, make sure it is set right by some good discounts on the property.
Get the Inspection contingencies done by a home inspector – Home inspectors will point out all the deficiencies which you or the agent might fail to notice. Once the inspector points out at leaking pipes, improper sanitation, and pest control issues, you can either ask the seller to correct it or counter these costs in the purchase price of the house.
Create a unique home – All the restructuring and renovation done as per your ideas will surely give a new look to the house. Once you are done with all the structural and repair work, make sure you devote some time and keep some budget to personalize the interiors to make it as good as new.
We have given you first-hand information on how to transform a fixer upper house into your dream abode. If you are considering re-selling it, you can also use the same approach except that you will have to leave out the last point and list it for sale.