The definition of a fixer-upper is broad. It can be a house that simply needs "cosmetics" like fresh paint and updated fixtures - or a major renovation requiring foundation work and structural repairs. It's important that you assess your own abilities and interests before deciding to buy a fixer-upper. Some of the many questions to consider:
- What skills (such as painting, carpentry or laying vinyl) do you have? Which are you willing to develop or pay for?
- How much money are you willing to spend?
- How long would you like the project to take? Sometimes the repairs to a fixer-upper can take weeks or months. Are you comfortable living in disarray for a period of time?
There are several possible advantages to buying a house in need of repair or remodeling. Many homeowners are able to buy the home for less than the market price. Plus you get the pleasure of truly becoming your own designer. You can choose paint colors that appeal to you, the flooring design/materials you like, and so on.
A property inspection is recommended for any home purchase. When you're buying a fixer-upper, it's important that you consult with an expert who can give you a thorough report outlining which repairs or updates need to be done. A home inspector or contractor may be able to help you prioritize the repair items. New homeowners who choose fixer-uppers are sometimes working with limited budgets and therefore are unable to address everything all at once. So what should be done first - roof repair, foundation work, electrical system upgrades or plumbing? Let the professional, and your common sense, guide you in terms of making this priority list.
Some fixer-uppers have "good bones" - meaning they're structurally sound and simply need to be updated or remodeled. For many first-time buyers, this is a wonderful entry into the process of fixing up property. Since you're not dealing with the larger structural issues, you're free to focus on cosmetics, such as updating flooring, applying fresh paint, installing new hardware in the kitchen and bath, or perhaps pulling out old carpet and redoing hardwood floors underneath.
Financing the repairs and upgrades can be accomplished in a variety of ways. Consider the Wells Fargo Purchase & RenovateSM loan, which offers money for the purchase as well as for renovations. The interest on the cost of your improvements may be tax-deductible, and you have the luxury of being able to begin the renovations immediately. No reason to wait on updating that kitchen or putting in a new bath!
Some homeowners would prefer a home equity line of credit, such as those offered by Wells Fargo Home Equity, so they can draw down the money as they need it, thereby only paying interest on the money they need. Similar to a home renovation loan, the interest on home equity loans and lines of credit may be tax-deductible.
I will be happy to discuss the various loan programs that may provide the cash you need to make a fixer-upper your beautiful "new" home.
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John, one of the factors renovators need to consider is TIME. How long will it take them to fix up the property so that it becomes a producing asset? These projects often take longer than estimated. Will it be better to do it yourself, or to pay to have someone else do some or all of the work?