Fixer uppers can be an intimidating prospect for first-time home buyers. The work involved can take months, cost a considerable amount of money and swallow up every weekend for the foreseeable future. And it’s a gamble; there’s no guarantee that after all that hard work you’ll recoup the money you’ve put into it. However, you can certainly improve your chances by taking a few precautions and making sure you understand what you’re getting into. A fixer upper in a desirable area can net you a handsome return on investment if you’re willing to put enough sweat equity into it. There are many benefits to going this route. You’re purchasing a home at a lower sales price without steep competition from other buyers. There’s potential for significant resale profit, and you’ll gain considerable knowledge about rehabbing and maintaining a home that’ll serve you well in years to come.
The first step in the buying process is finding out how much a lender will give you. Determine your level of credit-worthiness and meet with different financial institutions to find the best deal, then get a letter of pre-qualification, which marks you out as a buyer in earnest. Your real estate agent can help from there, but be sure to find one who has experience working with distressed properties. The rationale behind buying a fixer upper is to pay less for a property the value of which will increase significantly with hard work and creativity.
Remember that location is key when buying real estate. You could turn a fixer upper into a palace, but it won’t do you much good if it’s in an undesirable part of town. Look for fixer uppers in desirable neighborhoods with excellent schools nearby and positive, long-term market potential. Make sure your prospective home has good structure, a floor layout with good flow, and rooms with sufficient size. A home inspection is essential if you’re considering a fixer upper. A thorough inspection will turn up any red flags, such as foundation or major structural problems, as well as bad plumbing or a roof that will need major work. Pay careful attention to what your home inspector has to say – he can help you avoid investing in a money pit. Fixer upper homes for sale in Miami, Florida, have a median listing price of $420,000.
Plenty of first-time buyers have leaped into a fixer upper project only to find that they didn’t have the skills, patience or money to see it through. Once you’ve heard from an inspector, make a careful and honest appraisal of your skills and the level of work that needs to be done. If you have any doubts about your ability to handle the work that needs doing, you should start looking for something that’s a little less demanding. And don’t forget the need for power tools, such as drills, jigsaws, and sanders, and a full set of hand tools. If you don’t have the tools you need, a fixer upper may not be a great idea after all.
Where to begin
Consider starting on essential features, such as the flooring, electrical system, and windows and doors. Painting or stripping and replacing wallpaper are also good projects to start with, as is refacing or replacing kitchen cabinets as well as baseboards and trim. If your HVAC system needs work, consider starting there, especially if it’s winter or summer and you need a home that’s warm or cool enough.
Sell or stay?
If market conditions are favorable, it might be worth considering selling once you’ve completed your renovations, or you could give it some time and wait until you’re in more of a seller’s market. If there’s an opportunity to make a sizable profit, it’s definitely worth considering. Remember, the great thing about fixer uppers is the profit you can derive if you do it right.
If you’re a first-time homebuyer, a fixer upper is a good way to afford a property for less money, which can come in handy if money is an issue. However, proceed with caution if you aren’t a very handy person. It’s a major commitment, and it’ll take time and patience.
Written by: Bret Engle | DyiGuys.net