The Reno housing crunch is expected to continue through 2019. And the median sale price for a Reno home hit an all-time high of $355,000 in November 2017. So, your sights may turn to buying a fixer-upper as an option. These are still hard to find in today's market. However, when you do locate one, heed these Reno fixer-upper tips to create your dream home rather than buying a money pit.
Reno Fixer-Upper Tips
Worst House/Best Neighborhood
Anyone who's a fan of those HGTV fixer-upper TV shows knows that the #1 rule of buying a fixer-upper is to look for the worst house in the best neighborhood. Why? For one thing, location. You can tear down walls, add rooms, paint and powder to your heart's content. The one thing you can't change is where your Reno home is located. A desirable neighborhood brings in higher comps. Higher comps give you something to work with budget-wise for your Reno fixer-upper.
Keep your spending to around 20-25% under the cost of similar homes in the area that are in good condition. Only compare homes similar in size as well as the number of bedrooms and bathrooms. This gives you a good sense of what you should spend on the sale price and any renovations you do. Otherwise, it's not worth the investment.
Cosmetic Changes - Yes. Structural Changes - No.
You want to keep the "fixing" part of your Reno fixer-upper to a minimum. Cosmetic changes (paint, flooring, etc.) cost the least to fix. Cracks in the foundation, mold, or pest infestation? Leave that to the more seasoned flippers. Structural changes, remediation, and abatement add major bucks to a renovation budget. For first-time fixer-uppers, these might be too much to tackle right now.
Obtain an Estimate of the Work
Before you submit an offer on that Reno fixer-upper, have a contractor come out to give you an estimate for the work you want done. Then, add 5-10% to that estimate. There are always unforeseen expenses that come up with any fixer-upper.
Fashion an Offer
Take the list price and add the estimate for the work you want to be done. Then, compare this total with comps of other homes in good condition in your neighborhood. Does your cost fall below the comps? Then this Reno fixer-upper could be a good candidate for you. If not, smart money says move along to another possibility.
Make a Budget and Stick to It!
Budgeting is key for any successful Reno fixer-upper. Adding that 5-10% to the estimate helps you absorb some of the impact if an unknown problem occurs. If something even bigger arises, you may have to scale back in other areas of the renovation in order to stay on budget. So, be prepared to be flexible. Even small things like drawer pulls or light fixtures can add hundreds of dollars to your budget if you're not careful.
Buying a Reno fixer-upper may be one way to dip your toe into the tight Reno real estate market right now. However, these are few and far between. But, with a bit of homework, budgeting, and fortitude, you could make it work. Contact me when you're ready to go house-hunting.
Originally posted on my Reno real estate blog here: https://www.relocationtoreno.com/2018/01/02/reno-fixer-upper-tips-avoid-the-money-pit/.