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‘Fixer-upper’ is a popular term used to describe a property that needs some work. Such properties are often cheaper to buy than regular homes because of their condition. While this makes them ideal for buyers on a tight budget, the cost of repairing them and improving them can sometimes be expensive.
Of course, you could end up greatly boosting the value of your property by making these fixes – which could allow you to one day sell your property for a huge return. However, it is also possible that new problems may keep arising, and you could end up spending far more than you can afford.
Just how do you make sure a fixer-upper is a good investment and not a money pit? This post explores some of the protective measures that could be worth taking.
Arrange a home inspection
Before buying any property, it is always wise to arrange a home inspection. This involves paying a professional surveyor to fully inspect the condition of the property, so that you know exactly what repairs are needed. There are different types of home inspections that you can carry out – it’s worth arranging a full inspection so that the entire property can be examined.
These inspections could help to spot hidden damage and issues such as old electrics, old plumbing, foundation issues, roof damage and pest problems. Knowing what issues a property has can help you to budget for maintenance and determine whether a property is worthwhile buying.
Know your budget
Before buying a fixer upper, it’s important to have a clear budget in mind. This budget should cover the upfront costs (like the down payment, legal fees, home inspection and moving costs), as well as any urgent repairs that may need to be carried out when you move in. Some repairs may be able to be done at a later date, but it’s important that you can afford to carry out the most necessary ones and that you haven’t just budgeted for the down payment. For borrowers looking to cover both purchase and renovation costs, flexible home loans from a trusted financial provider can give fast access to funds for real estate improvements, helping you stay on budget without compromising your plans.
Understand what’s urgent
Understanding which repairs you can delay and which need to be done immediately will help you determine whether you can afford a fixer upper or not. If there are loads of urgent repairs, you may need to set aside huge amounts of money upfront. If most of the repairs can be delayed, you can spread out the cost of maintenance – which could be more affordable in the long run.
Consider your DIY skills
Being DIY-savvy can save you money when buying a fixer-upper. You won’t have to pay professionals to carry out repairs and renovations and can build up ‘sweat equity’. Some repairs like electrical repairs and plumbing repairs are always safest to leave to a professional tradesman. But tasks like repainting walls, stripping old carpets and even tiling could all be things you are able to do yourself.
Assess your long-term goals
You should consider what other goals you have in the future, and whether buying a fixer-upper might interfere with them. If you want to get married or have kids in the next few years, you should consider whether you will have the money or the time for repairs and renovations.
You should also consider whether you’re looking for your forever home or whether you’re looking for a stepping stone – a property that you can eventually sell in order to buy a newer and better one. This could influence how much work you are willing to put into a property.
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