Due to HGTV’s meteoric rise in popularity, many homebuyers are considering fixer-uppers. While the TV shows make it look quick and easy to fix and flip a house, the reality isn’t always quite so simple. However, buying a fixer-upper can be a great way to design the home of your dreams, while also scoring a house in the location you’ve always wanted.
One of the most important factors is location, location, location! Make sure you love the neighborhood since you’ll be investing so much time, energy, and money into the property. I can help you assess the potential ROI of a fixer-upper based on comparable market sales too.
If you’re thinking about jumping into the fixer-upper game, there are a few things to consider.
Figure out your fixer-upper financing
How are you going to cover the cost of all the renovations? You may be able to find a loan program that allows you to roll the cost of renovations into your mortgage payment. Some homeowners choose to take out a home equity line of credit or a home equity loan to finance the construction costs.
Depending on your situation, your potential choices could be a conventional loan, an FHA 303(k), a VA renovation loan, a Fannie Mae’s HomeStyle renovation loan, and more. Renovation loans often require additional appraisals and inspections, so be sure to consider that as well. Wondering where to start with your home financing? Reach out to me and I’ll put you in touch with a home loan expert who can have a conversation about your options.
Whatever path you decide, make sure you have a solid financial plan in place before you start seriously home shopping.
Don’t get excited to settle down in your house right away
Depending on the amount of work the house needs, you may need to find an alternate living situation. If the house is still livable, you should consider the important things, like bathrooms and kitchens. If those aren’t in working order, think about your contingency plan. After buying a home, don’t expect to grab the keys and start unpacking - the house may need work before you can tackle those moving boxes.
Talk to a contractor about the potential repairs
A home inspection is part of the home buying process, but if you’re considering a fixer-upper, you should take it another step further and talk to a contractor. Having a professional contractor assess the necessary repairs and renovations will help you prepare yourself for how long the home will be under construction, as well as the financial implications.
Just remember - large renovation projects often take longer than the original timeline, so make sure you are mentally prepared for roadblocks and issues to arise throughout the process.
You get to create a home you love
Isn’t this why so many people want to buy a fixer-upper? Construction can be a challenge, but at the end of it all, you’ll have a home you created. No matter what kind of renovations you undertake on a fixer-upper, you’ll be able to look back on the project with pride.
What if you’re fixing up the house to rent or sell? That’s great, too. Many buyers who purchase homes in need of renovation realize a financial benefit by renting out the home or turning around and selling it.
Whether you’re ready to start looking or you just want to chat about your options, I’m always available! Don’t hesitate to get in touch with me to talk about the market in your area.