Prospective buyers are usually faced with one of two choices when buying a home: a fixer-upper or a newly renovated home. Both options have their pros and cons, and it’s important to consider aspects like budget, time and interior design before deciding which is the better option. Fixer-upper homes often involve purchasing a home at a low cost and making some much-needed renovations. While this may be a great option for some, consider the following before purchasing a fixer-upper.
Consider Your Budget
Your budget is one of the most important aspects to consider since you’ll need to decide how much money to set aside for not only purchasing the home, but for any necessary renovations as well. Some renovations may also be too costly to repair, such as severe mold behind drywall. You can also use a 203K loan (a type of mortgage given by the Federal Housing Administration) to buy a property that needs a lot of repairs. You may also have to budget additional money for contractors if renovations are too large to handle on your own.
Consider Your Time
Making repairs on a fixer-upper may be costly to your time as well, especially with renovations that are difficult and tedious to tackle on your own. Since fixer-uppers may also not be move-in ready right away, you may have to spend several weeks and months making repairs. And if you’re thinking about hiring a contractor, you may have to set aside ample time to research and find the best person for the job. Other aspects to consider regarding usage of time includes:
- Time away from work
- Time away from kids and pets (consider if you’ll need to pay for daycare or a dog sitter)
Consider Your Eye for Interior Design
Purchasing a fixer-upper also involves taking leadership when it comes to interior design. You’ll be deciding what the home layout should look like and what building materials and color choices to use. Interior design isn’t just about the aesthetics of the home; it’s also about repairs and renovations. Some projects to tackle first may include:
- Replacing windows
- Resurfacing cabinets
If you don’t have an eye for interior design, the energy to do these types of repairs, or the equipment you’ll need for minor or major repairs (like a reliable drill, jigsaw and sander), then it may be time to consider buying a finished home. A finished home may give you peace of mind since all of this work will be taken care of for you (albeit at a potentially higher cost).
The Buying Process for a Fixer-Upper Home
The buying process of a fixer-upper home typically involves the following:
- Scouting the location
- Inspecting the condition, layout and configuration of the home
- These may include inspecting for pests and optimal sewer lines
- Check to see if the fixer-upper home comes with a roof certification, a home warranty and an engineering report
- Calculating the approximate costs of needed repairs
- Expensive fixes may include reroofing, kitchen and bathroom overhauls, and replacing HVAC systems
- Factoring in how much time to set aside for doing such repairs
- Purchasing any tools, paint and equipment for renovations
- Buying the fixer-upper home and implementing a plan of action
To estimate your home affordability, you’ll need to know aspects such as:
- Annual income
- Down payment
- Monthly Spending
- Loan type
- Current average APR
Should You Stay or Sell Your Home After Renovating?
This is an important question to ask since renovating takes up an ample amount of time and money. Consider the following scenarios before deciding to sell your home:
- Are you thinking about starting a family, which may require a larger amount of space?
- Does your job or career requires you to move?
- Do you have an emotional attachment to your home?
- Will you earn back the renovation costs?
- Do you have the time and energy to sell your home?
Buying a fixer-upper home doesn’t have to be a difficult process, but it’s important to factor in things like your budget, time and eye for interior design before taking the leap. Consider online resources to calculate your home affordability, as well as utilizing contractors, friends and family to help out. Photo Credit: Pixabay.com