When it comes to buying real estate properties, a fixer-upper can be a good choice in some situations. But it is very important to be prepared and know what you are doing before purchasing a house that needs a lot of work. While a fixer-upper typically costs less than similar homes in the same neighborhood that are updated and in good condition, the wrong fixer-upper can quickly become a money pit. If you're interested in buying a fixer-upper, use the following tips:
Look for a House with Good Bones
In most cases, a fixer-upper that is for sale won't look very appealing when you view it. With some fixer-uppers the owners have just failed to properly maintain and take care of the home, while others may not have been updated for decades. One of the keys to buying a fixer-upper is to buy one "with good bones", meaning that cosmetically the home may have issues, but structurally it is sound. Unless you have a ton of money to spend, you should avoid homes with foundation issues, a failing roof, an outdated electrical system, an HVAC unit that is on its last legs, or a septic system that needs to be replaced.
Get an Idea of How Much Renovations Will Cost
Before buying a fixer-upper that needs a lot of work, it is in your best interest to have a good idea of what you will pay out of pocket to renovate the home and improve its condition. You may want to consider hiring a structural engineer and a general contractor to tour the home and give you ballpark figures of how much it will cost you to transform the home into what you want it to be. Having a figure before you buy the home will let you know if you can actually afford to pay for the house and make the needed renovations.
Don't Be Afraid to Ask for a Discount
Fixer-uppers are typically priced lower than other homes for sale, but that doesn't mean that there is no room for negotiation. A lot of buyers are not interested in fixer-uppers because they don't have the liquid capital needed to pay for renovations and repairs. Since some fixer-uppers stay on the market longer than other houses for sale, an owner of a fixer-upper may be motivated and willing to offer a discount if it means that the house will be sold.Share