The fixer upper has been touted as the lifesaver for homebuyers with limited budgets. Thanks to many popular televisions shows, the miraculous transformation from nightmare to dream home seems simple enough. If you are low on cash, buying and renovating a fixer upper is always an option.
However, remember that the television shows not only reveal a stunning home at the end of the reno but also some of the obstacles you can expect in the process. Here’s what to look for in a fixer upper to avoid heartbreak.
Location, Location, Location
It’s every real estate agent’s mantra and should be yours as well. The key to finding the right fixer upper lies in choosing the right location. After all, the reason you want a fixer upper is so you can afford to get into a more desirable area.
Your best tool for finding the right location is your real estate agent. You can discuss areas of interest, and also get input on ideal neighborhoods you might not know about. They’ll have the scoop on the fixer uppers that have been sitting on the market for a while.
Remember, a home can be fixed to suit your needs, while a location can’t. You’ll want to consider:
- Neighborhood amenities
- Crime statistics
- Condition of surrounding homes
- Property values
- The street, i.e. is it traffic-heavy?
Don’t forget negatives such as nearby train tracks, a stinky landfill site, or local construction that can go on for years
ROI for Renovations
Your reno dollars have to make sense for your area. It’s easy to get carried away with over the top renovations without a clear understanding of how they might negatively impact resale value.
Known as after renovation value (ARV), you want to ensure the improvements you are planning provide the best possible ROI. In general, your home will increase in value. However, if you over-invest in renos, you might never get that money back. If you have a $30,000 kitchen in an area where such extravagances are not expected, you might hit a wall when it comes time to sell.
Your real estate agent will provide valuable advice on the ARV based on your proposed renovation plan.
Don’t Sweat the Small Stuff
It can be overwhelming to imagine a home with green shag carpet, a different wallpaper in every room and a severely outdated bathroom making a suitable home. However, these issues are purely “cosmetic” and easily resolved with basic renovations. Avoid getting preoccupied by the appearance of the home and instead depend on an inspection to find the real issues.
Inspections are a Must
Getting the right inspections is especially important if the house is an “as is” sale. Some of the key areas to check include:
- Electrical, plumbing and sewer systems
- Air conditioning and heating (HVAC) systems
- Driveway, decks or steps
- Extensive work needed on bathrooms and kitchen
- Pest inspection
- Sewer lines
- Thermal imaging
There might be other inspection services to consider based on the location of your home. Speak to an inspection specialist and your real estate agent to find out what else might be required.
Ready to Make Your Move? Choose Lakeside Title
Lakeside Title Company helps buyers and sellers make a smooth, simple real estate transaction. We can help with your fixer upper purchase so you can focus on your renovations. Take a look at our services and contact us to learn more.