Here's a great summary of the reasons TO BUY or NOT TO BUY a house that needs a big renovation from my bloggind colleague Valerie in Virginia. What she has written for her Virginia buyers is also perfect advice or my clients in Illinois.
I'm often faced with telling the hard truth to buyers who fall in love with a historic property because I want them to have a great experience with their new home, no matter how much work it needs.
So, as Valerie says, if you have the time, money, patience and skill -- let's go find a fixer upper for you that will make financial sense.
Is buying a “fixer upper” still a good idea?
Buying a home that needs work has always been and will always be a great idea for the right person. The advantages of buying a home that requires some TLC have not changed. The ability to buy a bigger home or to invest in an area that you could not otherwise afford are two of the main advantages of buying a fixer upper but are you prepared for the long road ahead?
Too often home buyers (and investors) underestimate two critical elements of renovating a home; time and money. There’s nothing worse than finding that you’ve already spent your remodeling budget when the home is only half done. Be sure to take the time to get realistic estimates for all of the work that you plan to do yourself as well as with contractors. The time to do this is before you buy the home and certainly not after you’ve invested most of your money and time.
The first inventory you need to take is of yourself. Am I the kind of person that is able to finish what I start? Many people start off with a bang but end with a whimper. If you know that you have the ability to see it through to the end no matter what it takes, than go for it! If you currently have half a dozen unfinished projects that never seem to quite get completed than you had better reassess your goals. The last thing you need is a half finished home.
Are you handy around the house? If you are good at do it yourself projects than you’re off to a good start. You don’t need to be Bob Villa to do a variety of different remodeling jobs but you do need at least some basic skills before attempting to renovate a home. If you’re comfortable with a hammer and screwdriver and able to learn you might be ready to go for it. If you’re all thumbs and need to hire help for everything exactly how much money will you really save in the long run?
Do you have the money for the unexpected? No matter how experienced you are in these matters it’s a sure bet that there will be unexpected expenses. “The best laid plans of mice and men…” is the rule of thumb here. After you have done your research and know what you need to do what you want to do with the home it’s best to add at least 10% to the budget. 20% is even better. Trust me on this one. I’ve seen more than one house project go awry simply because the furnace went up or the central air unit needing replacing. Even if your original estimate is dead on at least you’ll have a little something left over when the work is done (but don’t bet on it).
Are you willing to compromise? If the need arises will you settle for the less expensive kitchen cabinets or scrap the crown molding idea? If all else fails and you find that you simply can’t complete your dream home as you had originally planned for sacrifices will need to be made. The important thing to remember here is finishing the home 100%. You can always upgrade in the future if you’re really dissatisfied but choosing the lesser expensive options can often make the difference between getting done within budget and not getting done at all.
Location, location, location is still the golden rule of real estate! Regardless of your budget be sure that you buy a home in an area that is worthy of the work. What do I mean by that? Well, I wouldn’t want to buy a home for $100,000 and invest another $150,000 in renovations if the average price of a home being sold in the area is only $200,000. Don’t laugh, I’ve seen this more than once and the homeowner has now over invested to the point that it will take years just to get even. Do a little research on the current homes for sale before you buy and you just might save yourself a lot of heartache.
If everything’s in order than you’re ready to go! Many people make their first fixer upper the house of their dreams and save a lot of money doing it. If you’ve read this and feel confident that you have what it takes then the time is now! Why wait? By the next New Year you could be living in your newly renovated dream home!
Valorie L Ford