We've all heard about buying a "fixer upper." Basically, this references buying a house that has some problems, maybe a sunken floor or cracked tiles, ugly carpet or poorly sealed windows. These are small problems that could be fixed easily and cheaply and, once completed, will make the house completely livable. When looking for a fixer upper, you want to find a home that's listed at a low enough price that, once the cost of fixing it up is accrued, you will either still have a below-market deal or you'll be able to sell the house at a large profit.
In today's blog, we're going to look at a few of the pros and cons in buying a fixer upper. When you're looking for a new home, especially a first home, it can seem like a great deal. However, there are some key things to think about when making this decision. Here are some facts.
Buying a house that has some issues, like an out-of-date kitchen or and ugly bathroom, can be a good idea. Any negatives in the home can be used to negotiate a lower price, which is something that you want. What's more, the low price will usually go up once you've dealt with these issues.
This doesn't mean you're intending to sell the home. Remember, value is based on needs and wants. If you can easily make a fixer upper what you want then it will increase the value it holds for you.
However, there is also a monetary issue to consider. If you eventually move out and sell your home, you might be able to sell it at a greater price than you purchased it for. Some people spend their entire careers "flipping" houses, though it's not something that any novice should attempt.
Buying a fixer upper takes a lot of expertise and knowledge. If you are looking at a home that has several issues, make sure and have it inspected first. That way you will know all of the problems you're facing. After that, consider what it will cost you to fix those problems.
This can be extremely difficult, because it's hard to gauge how much money it will cost in the end. There are a lot of unknowns, and several issues that can surprise you in the processes. Redoing a kitchen can be a very costly venture.
At the same time, you might not be able to sell the house for a greater profit once you've added up the cost of the home and the cost of the repairs. It's very common to lose money in flipping a house, especially with the current state of the housing economy.
While there are several things to consider when buying a fixer upper, remember that it's a decision that ought to be informed. Gather as much information on the house that you can, including estimates for fixing certain issues. While it can be a risky venture, buying a fixer upper can be a great deal, especially if you know all the facts.