If you’re about to purchase a home, you may have thought about buying a fixer-upper. Although these types of homes can be priced accordingly, they often need a lot of work, which can require a good amount of time and money. However, there are a lot of benefits of a fixer-upper that are definitely worth considering. You can customize the home the way you want to, but the lower sale price also means more affordability. Perhaps you want a home in a certain area or you a specific size, but newer models are just out of reach. With a fixer upper, you might be able to afford the home you really want or in the area you prefer, but it just needs some renovations before it becomes your dream home. But before you decide to go through with purchasing a fixer-upper, you’ll want to consider the following:
You’ll likely spend more than you’re planning to
You may already have a specific home remodeling budget set in place, but you should almost always to expect to spend more than you initially plan on. Even if there aren’t any pertinent issues to turn up during a home inspection, it’s not unusual for things to go wrong during renovation projects, especially in very old homes. As such, any given home renovation project can end up costing thousands more than originally anticipated. Whether labor expenses end up costing a lot more in the end, or you need to spend more on materials, you’ll need to have some wiggle room in your budget to account for these things.
Not everything can be fixed
Even though you’re purchasing a home that you already know will need a lot of extra care, it is still critical to get a home inspection before you make any final decisions. Not all issues can be fixed, and any significant problems can likely be revealed during a routine home inspection. You may discover something that is very expensive to fix, and it may no longer be worth it to purchase that specific home, at least for the price listed. Fixing major cosmetic issues is one thing when you’re buying a fixer upper, but when you’re talking serious structural issues that are very expensive to fix or can’t even be repaired, you’ll usually want to move on. The last thing you want when you’re trying to save money is to end up purchasing a home that just costs you even more money in the long run.
You might not always get a good deal
You think you may have finally found the one: the structure is good, it’s in a terrific neighborhood, and the price is right. But don’t be so quick to make any final decisions—or even make an offer—unless you know for sure you’re getting a great deal. You want to make sure the home is priced accordingly and that your investment is a good one. Research the local housing market, and compare the home you’re thinking about buying. You’ll also want to factor in the time it will take to fix it up, in addition to how much it will cost. In the end, the value of the home should even out with comparable properties, or be worth even more. Otherwise, you might want to make an offer that’s much lower the asking price—but one that is fair, based on your research. If the seller won’t budge and you’ll be losing out on the deal, keep looking.
It may not be worth it
When people buy fixer-uppers, they usually look forward to the renovations and remodeling. They don’t think of it as a hassle or as work—it genuinely seems like fun. And while remodeling a fixer-upper certainly can be a lot of fun, in some cases, it may be more trouble than it’s worth. Some projects could take a lot longer than expected, and when they also cost more than expected, it can be a frustrating experience overall. It can seem like an endless ordeal if there always seems to be something else that needs to be improved upon, repaired, or replaced, and you may end up regretting a fixer-upper.
Do you need extra cash to remodel your home? Contact Peachtree Financial Solutions today to learn how you can sell your future annuity payments for a lump sum of cash.
Nothing above is meant to provide financial, tax, or legal advice. You should meet with appropriate professionals for such services.