Is a fixer upper worth the repair and improvement costs?
by William on Saturday, May 1st, 2010 | 6 Comments
Is a fixer upper Really worth it?
I am in the market for a house. Something not too expensive and preferably rent to own.
I recently came across a house that really is a true 100% fixer upper.
Needs new windows, carpet, plumbing work, paint job, and possibly roofing.
Now my question, is buying a home such as this one (with the potential to be something amazing) really worth the extra out of pocket expense just to make the house livable and then the extra money to make it pretty?
it truely depends on your will and love for the home. with the description you gave you should have an inspector take a look at it if you havent already to tell you what you will need. fixing a house up is very tedious and time cinsuming but the results are very much worth it. i would say go for it
Any home is in constant need of repair.If you like the house and the area is good then you should buy the house with the intention of living in it.You would need a lot of skill to do the work yourself,or a lot of money to have someone else do the work.
Many fixers aren’t really worth it, if you figure the cost to make them right. It really all depends on the deal, and the financing. I’ve bought fixers when I couldn’t buy any other house, because owners generally have to finance them themselves. This might be the only way for you to step onto the property ladder.
I don’t think you can properly assess the value of any property until you’ve actually, personally looked at AT LEAST 100 similar properties. It takes that long to get a feel for the market, unless that’s what you do for a living anyway.
a lot of things has to be taken into consideration before doing something like this,first of all don’t pay any attention to these tv shows that come on like flip this house,mot of the time they don’t show the complete rehab,but if you can get it for a dirt low price and its in a neighborhood where it can stand the increase in property value,and if you plan on staying in it til some good equity has built up in it before selling,if you can get a contractor that wont lead you down the merry path,if you can buy the upgrade material for a good enough price and make it come in at or under budget,then yes they are worth every penny of it,but before you get all starry eyed try and keep a professional attitude and look at it as an investment and what you do to it is the return on the investment then you might come out to the good and have a nice home to boot what ever you decide i wish you good luck
Consider if you enjoy home improvement projects and are willing to commit at least one year to the project. If you like to entertain, forget about it until you’re done. Do you have a spouse and or children who will be affected. Do you or any of them have asthma which may be aggravated by the dust? If the house is older than an early 80′s home, it’s reasonable to believe that asbestos may have been used in it’s construction. How much of the work will you do yourself versus subcontract out. Home improvement projects are stressful at best and rarely are without unforeseen problems. You’ve mentioned several issues of the home that require your attention but I’m willing to bet there are other problems that will require time and money to correct as you progress through your renovation.
Good luck.
You have to go through the house and make a list of anything you can find that needs fixing. Use the cost of these things as a bargaining tool for the purchase price. Have several categories in your list.
First category is what you need to do right now to make it livable such as new wiring, working plumbing, replace the collapsing front stairs, fix the leaking roof. Some of these projects can run into a lot of money, and with wiring, for instance, you sometimes can’t insure the house if the wiring is really bad or old. That means you pretty much have to fix it right away, maybe even before you move in. If you don’t know how to assess these things, then you must get someone you know who does, or hire an experienced home inspector and insist on being there when he inspects so you can learn what you’re looking at. You could easily pay $20,000 for a new roof and new wiring, at least where I live. After you know what’s wrong, you must get quotes from qualified people who can fix them, and make sure you find out how much is labour and how much is materials so you can get an idea how much it would be if you can do the labour yourself. Remember that sometimes you find things are much worse then you thought once you start tearing things apart. Very few renovation projects come in on budget and on schedule
Second category is things you can live with until you have the money to fix them. If the carpet is disgusting, you can rip it out and live with bare floors for a while. If the walls are rough, you can live with that too, and work on them gradually. Maybe the same for painting. Those things you should be able to price out yourself. Measure the spaces involved, and find out how much it costs to install new flooring or paint the exterior. Measure and count everything like windows and go get quotes from stores and glass shops.
Third category is your wish list. This is the stuff you don’t need at all but which would turn the house from a decent place to live into a show home. Use your imagination on that one, and the sky’s the limit for what you can spend if you have it.
Do you own tools already, or will you need to buy them? I’ve been doing most of my own work around the house for many years now, and have collected tools bit by bit as I found the need for them. I haven’t got anything incredibly good quality or fancy, but if I had to go out right now and buy what I consider indispensable for proper home maintenance, I could easily spend several thousand dollars in a couple of hours.
If you’re looking for a rent to own, I have to assume that you don’t have any money for a downpayment. If you don’t have the money for a downpayment, where will you get the money to pay for what needs doing to the house? One of the reasons that lenders have traditionally expected a downpayment from buyers is partly to ensure that the borrowers are capable of handling what can be the occasional unexpected large expense of owning a home. If the furnace needs replacing in the middle of winter you need to be able to handle paying for it. I had a rental properety where the sewer kept backing up into the basement. It eventually cost me $8,000 to fix. We’re seeing the consequences right now of lenders not following that practice of requiring downpayments.
Make a very careful budget before you decide what to do, and remember that things almost always cost more than you expect even if you’re only buying materials. I rarely come out of Home Depot having spent less than $200 for a few little things. Also be realistic about how much time you have for these things. If you’re going to work every day, if you’re on your own which it sounds like you are, you probably are going to have one full day and a few evenings to work on the house. And don’t forget: there’s always another house. This won’t be the last one you can find.
I don’t know much about rent to own plans, but if I wanted to do it, I’d get a very detailed contract and get a lawyer involved so it’s all clear and legal.