Buying a fixer-upper comes with many benefits, such as a lower initial cost. However, you need to exercise caution as there could be some major issues lurking underneath the perfect home exterior. From budgeting to managing stress, here’s what you need to know when buying.
There Could be Major Issues
It can be a dream come true to find a property that needs a bit of work but meets all your expectations. However, there can be major issues hidden in plain sight. In specific climates with extreme weather, for example, the property might need expert storm damage roof repair that comes with unexpected costs. Many new homeowners underestimate these kinds of costs, so ensure you have all the necessary details and ask questions so you aren’t blindsided.
Buying a Fixer-Upper Requires a Budget
The average cost to renovate a fixer-upper is around $283,000. That’s a lot, but still about 29% less than a home ready to move into. Either way, there will be tasks that need to be done, and a budget is your best friend. Each case is different, but there are universal tips for renovation:
- Get a good estimate of costs by booking a professional surveyor to assess the home.
- Include costs of materials, labor, and permits for unforeseen problems that can arise.
- Stay within budget by tracking costs, staying flexible, and negotiating with contractors.
You Will Need Expert Inspections
While a house can look structurally sound at first glance, there are many hidden problems that can rear their heads and cost a lot of money if ignored. These include issues with the electrical system, water and plumbing and roofing. There could also be other structural issues that need addressing such as foundational water damage and wooden beam rot or mold. Before committing to a purchase or renovation work, it helps to book an expert home inspector first.
You Can DIY After Buying a Fixer-Upper
Hiring experts for complex jobs is always recommended and a legal requirement in some cases, such as gas work. While it varies, it usually takes around 16 weeks or more to complete a fixer-upper project, and you can fix minor home issues yourself. Here are a few you can tackle:
- It isn’t too challenging to install some types of new flooring, such as laminate.
- Paint and other minor upgrades are pretty simple and can save you a lot of money.
- You don’t need an interior designer, and you can design layouts and decor yourself.
Financing Might be Needed
There is a difference between fixer-upper mortgages and standard mortgages. You might face less favorable terms and lower funding. However, there are other financing options available. For example, you can get a home renovation loan that can help avoid costly repair delays. You can also access veterans loans for home improvements and adjustable Fannie Mae and Freddie Mac loans for upgrades. So, be sure to explore all the available funding options.
Buying a Fixer-Upper Can be Stressful
Home repairs, in general, can be stressful, but a fixer-upper adds another layer. A survey by Scottish Construction Now found that 67% of people who undertook a fixer-upper job experienced a high level of stress. However, you can easily reduce renovation stress:
- Make a detailed plan for what needs to be done and establish a timeline for work.
- Be realistic when working with contractors and maintain friendly communication.
- Create a separate living space if you plan to inhabit the property when working on it.
Renovations Can Take a Long Time
One of the most overlooked aspects of renovating a fixer-upper is how long it can take. When you buy a property for flipping, time is money. However, even if you want to live in the house, time is still an important factor, especially if you consider your current living situation, which might not be ideal. If you aren’t sure, ask experts how long the work will take before you can safely move into your new home, and don’t forget to factor in potential renovation delays.
Summary
There could be some major problems lurking behind the walls when buying a fixer-upper to flip or live in. However, you can DIY some of the more minor issues to save time and money. Yet, any tasks will take time, so ask about how long repairs will realistically take when talking to your contractors. A better understanding of the jobs the home needs will help reduce the overall stress of the renovation time and give you a better idea of when you can move into the house.
