- Determine your budget and research renovation costs before looking for a fixer-upper.
- Look for properties that meet your needs in terms of location, condition, and goals.
- Set realistic expectations when deciding which type of fixer-upper to pursue.
- Have the property inspected and research local zoning regulations.
- Factor in all potential costs when determining the value of a property.
Existing-home sales continued to decline for the twelfth straight month, reaching a seasonally adjusted annual rate of 4.00 million – 0.7 percent lower than in December 2022 and 36.9 percent below prior year figures. Surprisingly, the median existing-home sale price still managed to rise by 1.3 percent, currently at an impressive $359,000!
Looking for a new home is both exciting and daunting, especially if you’re looking to buy a fixer-upper. While buying a house that needs fixing up can be a significant investment, it can also be a minefield if you don’t know what you’re doing. Here’s a guide to help you navigate the process with ease. Read on for some tips for buying a fixer-upper.
Determine Your Budget
Before you start looking for a fixer-upper, setting your budget is essential. Ensure you have enough money put aside to cover the cost of the property, the renovation costs, and any additional expenses that may arise. It’s essential to clearly understand the cost of the renovations to avoid overcapitalizing on the property.
Renovation Costs
In some cases, the renovations’ cost may exceed the property’s value. Research is critical to understanding what you can expect in terms of costs for different types of repairs and improvements. When setting your budget, be sure to factor in any unexpected expenses that could come up during the renovation process.
Look for a Suitable Property
Once you set your budget, look for affordable homes for sale. Consider the location and condition of the property, as well as your goals for the property. You can also research potential renovation costs to better understand what you’re getting into before committing to a particular home.
Set Your Priorities
Once you clearly understand your budget, you need to decide what you want from your fixer-upper. Do you want a house that needs minor cosmetic changes, or are you looking for a significant renovation project? Understanding your priorities will help you narrow your search and find a property that suits your needs.
Minor Repairs
If budget is your top priority, look for homes needing minor cosmetic touch-ups or repairs. If you’re looking for a significant renovation project and have the budget to back it up, look for properties needing extensive renovations to update them. When calculating your total budget, make sure to factor in the cost of any necessary permits.
Realistic Goals
No matter what type of fixer-upper you decide, you must be realistic about your goals and how much time, effort, and money you can commit to the project. Setting realistic expectations for yourself will help ensure your renovation project succeeds.
Inspect the Property
It’s important to have the property inspected by a professional before making an offer. This will help you identify any issues with the property and determine if it’s worth the investment. If the property requires extensive renovations, you may need to factor in the cost of hiring an architect or structural engineer to assess the property. The inspection should include the entire property – inside and out – to ensure all areas are in good condition.
Understand Necessary Repairs
Once the inspection is complete, you’ll better understand what repairs may be needed and how much money will need to be spent to make any necessary changes. You can also use this information to negotiate a better price with the seller. Make sure to factor in any potential repair costs when deciding whether or not to make an offer on a property.
Find Out Property Taxes
Property taxes can have a considerable impact on your budget, so it’s important to research this before making an offer. Tax rates vary from state to state and may even differ within the same county. It’s a good idea to contact your local tax assessor to determine the current rates before making any decisions.
Research Local Zoning Regulations
Before making an offer on a property, it’s important to research local zoning regulations. This will help you determine what types of uses are permitted in that area and if there are any special requirements or restrictions.
Buying a fixer-upper can be a great investment opportunity but requires careful consideration and planning. Before making an offer on a property, ensure you clearly understand your budget, priorities, and neighborhood. Have the property inspected by a professional, and make a clear plan for the scope of work and the timeline for completion. By following these tips, you’ll be able to find a fixer-upper that meets your needs and that you can turn into your dream home.
