Many buyers that want to save some money on their home purchase (or just want a challenge!) gravitate towards fixer-uppers. And while fixer-uppers certainly can be a good investment, there are definitely things you’ll want to consider before buying a home that needs serious work.
So what, exactly, are those considerations?
A recent video from realtor.com outlined some of the things you’ll want to consider when buying a fixer-upper, including:
- Go for cosmetic changes. Making cosmetic changes to a home—like removing wallpaper, updating flooring, or renovating a kitchen or bathroom—is significantly easier than larger renovations, like fixing a home’s foundation or repairing water damage. If you’re going to buy a fixer-upper, consider looking for one that needs cosmetic changes over having to fix larger structural issues.
- Get an estimate for renovations. Are you planning to hire a contractor to renovate your fixer-upper? If so, you’ll want to have the contractor give you an estimate before you make an offer; that way, you know if the renovations are within your budget and if the home is a good purchase. (To make sure your cost projections are as accurate as possible, make sure to add 5 percent to your contractor’s estimate for unforeseen issues.)
- Do the math before you make an offer. If you’re going to invest in a fixer-upper, it’s important to run the numbers before you make an offer. You’ll want to make sure that you can sell the house for at least how much you pay for it, plus the cost of renovations; ideally, you’ll want to make more than that so you can make a profit. If the numbers don’t work out and it looks like you’d lose money on the deal, it’s time to look for a different property.