I will often remind my buyer clients while they consider buying a house that this is real life and not HGTV. Popular TV remodeling shows glamorize the before and after. Buyers are thrilled at the potential for hefty profits. To the unwary, the right fixer-upper appears to be a moneymaking no-brainer. What’s it to moving this wall or adding a new bath? In reality, purchasing a fixer-upper takes considerable time, Money, patience, and a real estate agent who understands the process.
Here are three factors to consider before shelling out your cash to buy:
1. Location: Ask your agent to help you understand the existing market to determine what type of home is selling. Understanding where potential buyers are willing to invest their money will help to clarify if your fixer-upper has the potential to offer a good return on your investment.
2. Budget: Know your financial limits. Industry experts suggest adding an extra 20% to your budget. Differentiate between what improvements are necessary and what you simply want to do. Work closely with your lender or financial counselor. Next, once you’ve developed a plan, line up reputable, dependable contractors well in advance of your ideal start date.
3. Inspection: Work with the right agent, inspector, and maybe even an engineer to properly evaluate the major components of the dwelling. If it does not have a strong foundation, pass on it.
Overall, investing in fixer-uppers can bring considerable financial gain and a tremendous sense of personal accomplishment. The key is to surround yourself with the right people and do your homework before you start a project. This is real life, there is no editing as on the TV shows.