Fixer-uppers hold an irresistible appeal for many buyers. There’s the promise of a good deal, of uncovering a beautiful home hidden underneath an ugly one, and of making a profit through hard work. While all of these things are possible, they are only likely to happen if you do things right. Here are the key steps in order to achieve that.
Research Your Local Market
The first step in any home-buying process is to do research, and it is also one of the most important ones. An online search can be invaluable for this. For example, you can learn that the local market in San Bernardino is very competitive, that the average sale price is $303K, and that the average home stays on the market for 41.5 days. The more you know about your market, the less likely you are to make mistakes when it comes to buying and renovating your home.
Decide On Your Long-Term Plans
Do you intend to flip the house? Live in the house a few years to build equity, and then sell? Or are you building your dream home? Whatever your plans are, you should look for homes that have the highest potential for good resale value. According to The Balance, your ideal candidate will be in a great location and will have at least three bedrooms and two bathrooms, as well as plenty of storage and family space.
Budget Carefully
You are probably aware that the real cost of a fixer-upper is not the price you pay for the home. You may be less sure, however, of what that cost is. This needs to be estimated before you put in an offer. In order to do this, you need to consider all the costs involved: renovations, permits, financing, expensive structural work, and inspections. Always add 10 to 20% onto your estimated renovation costs to account for surprises.
Consider A Renovation Loan
Home renovation loans can help you cover the cost of renovations in your fixer-upper. There are different options, like an FHA 203(k), and Jumbo Renovation loans. Run some calculations to make sure that you are able to afford these payments - if you can pay for renovations with cash, it is probably better to do so.
Get Your DIY Kit In Order
Before you start planning any DIY work, make sure you have a complete basic household toolkit. According to The Spruce, this includes basics like a hammer, screwdrivers, a level, and a metal straightedge, but also more expensive items like a good cordless drill. Depending on what you are planning, you may also need more heavy-duty power tools like a sander or jigsaw. You can also rent tools from most hardware stores if you have a short-term need for something very specific or expensive.
Hire A Design Expert
Consider hiring a team of design experts for your renovation. They will be able to translate your ideas into a beautiful, coherent design, ideal for both living in and for boosting resale value. At Artistic Solutions, we offer both interior design and remodeling services, so you can turn to us whether you just need help with the decor or whether you want a more all-in-one solution for your renovation.
Buying a fixer-upper is more complicated than buying a move-in ready home. For many, that’s part of the fun. However, it also means that a lot more research, hard work, and commitment is needed. If you are willing to put in the effort, you may very well be rewarded with the home of your dreams - or a tidy profit.