Individuals or families can purchase fixer homes for a couple of purposes. These purposes include either for a home to live in at an affordable price, or for a home to repair and then sell to make a profit. There are some tips that you need to follow when purchasing a fixer upper home in either case to avoid spending more time and money on your investment or home than you intended.
Inspections
When purchasing a fixer upper home, make sure you get a home inspection. Thisoldhouse.com recommends that the real estate purchase contract include having a home inspection completed before the purchase as part of the contract. Choose the company yourself rather than accepting the inspector that the home owner wishes to use.
Repair Costs
When estimating repair costs, err on the side of overestimating the cost instead of underestimating it. This will help you avoid having to pay additional unexpected costs after you purchase the home. Some repairs, such as painting and drywall repair, are relatively inexpensive. On the other hand, expenses such as replacing new windows or electrical repairs can be quite expensive. Electrical repairs should be conducted by a professional, and therefore will include additional labor costs along with the supplies. The Thisoldhouse.com website recommends adding five to ten percent in costs for repairs above your original estimate. This will help you cover unexpected costs during the repair of the home.
Design of the Home
Make sure the layout is appealing and functional. Consider the number of bedrooms, the number of bathrooms, and whether there is a basement that can be finished to provide additional living space. Especially if you are planning to sell the house right away, compare its price with the prices of other houses in the neighborhood. Make sure that when you factor in the cost of repairs, you can cover your costs and still price the house within the average range of asking prices in the local market.
Invisible Repairs
If you are purchasing a fixer upper for investment purposes, avoid purchasing a home that has what Thisoldhouse.com refers to as invisible repairs. These include repairing the electrical or plumbing systems or the roof. The problem with these repairs is you will be spending a significant amount of money on repairs that cannot be seen. Buyers are reluctant to pay more for repairs they can not see, according to thisoldhouse.com.
Time
A Boston Globe article published on September 7, 2007, stresses that you should be careful when estimating the amount of time needed to repair a fixer upper. After starting the repairs, you might find that supplies take longer to receive or repairs cost more than planned. This can result in the need to hire professionals to assist you and can delay the finishing date of your home repair projects.
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