Buying a fixer upper home can be a fulfilling, profitable experience. Or it can be a nightmare full of unexpected expenses and unforeseen disasters. Or it can be both. There are secrets to doing it and doing it well. I offer this bit of advice to the average Joe looking to buy a fixer upper. Get an inspection. Heck, even get a *few* inspections. Know what you are buying – know what needs to be done and how much it will cost so that you know what you are getting into. Hubby and I didn’t do that with our home – at least as far as inspections go. But we did expect to redo everything. While it worked for us and we knew what we were buying at the time, not everyone is willing to go to the extremes we did. We bought our home “as-is” – septic at end of life, a/c at end of life, well at end of life and a host of other things. We replaced everything. And I mean everything. We didn’t just go down to the studs. We replaced the studs. New exterior walls. New electrical. New plumbing. Everything. If you know what you’re getting into – go for it. Otherwise, stick with the a home requiring the basics when you are looking at buying a fixer-upper.
There are many advantages to buying a fixer-upper like
- potential profit
- lower sale price
- no one else wants it – less competition
Like I said before, hubby and I didn’t buy the average ideal fixer-upper. The ideal fixer is one that doesn’t need a long list of huge repairs. One that everybody wants once it’s fixed up but not many can see past the imperfections until then. It’s hard and it was hard for us to see past the green and orange swirl shag carpeting, the faux wood paneling throughout, the not just dated but more like disgusting kitchen and bathroom. What we saw though was a house that when completed would be a 4 bedroom 2 bathroom home in a growing and changing neighborhood. We saw a family home with a big yard. We saw the big things you need to see when buying a fixer, like
- Location – a growing or already desirable neighborhood is great.
- Layout – having the bones of a home someone will want to buy – number of bedrooms, bathrooms and size of kitchen are huge things that potential buyers will be looking for when you go to sell.
And here is where I emphasize the most important point of buying a fixer upper. Everyone’s skill level is different when it comes to repairs. Do not underestimate the repairs that need to be done and don’t overestimate your abilities to do those repairs. It will cost you big time before it’s over. My hubby has been able to do every last detail of the work we’ve chosen to do on this house. And it’s saved us tens of thousands of dollars as a result. If he’d gotten over his head on even one project it would’ve been a disaster.
“Easy” home fixes are
- drywall repair/painting/removing wallpaper
- refinishing floors – we’ve done this in all 3 of our homes and it’s a huge bang for your buck in resale value.
- installing new kitchen cabinets or painting/refacing current cabinets
- replacing light fixtures, doors, trim, baseboards
- outdoor renovations like exterior paint, adding landscaping and a deck
Not so easy fixes are
- replacing electrical and plumbing or sewer – very labor intensive and since they aren’t visible to potential buyers they don’t hold as much value – although nice to not have to worry about, most buyers want to see visually appealing renovations like a kitchen or bath upgrade
- installing all new windows
- replacing HVAC
Going into a fixer upper requires knowing your limits. Can you live with eating takeout for however long it takes to redo that kitchen? Can you stand to share one bathroom between 4 people while the other is under remodel? Do you mind having your bed in the living room while the bedrooms are being gutted? Really, this is easier said than done. I think most people, if anything like me, don’t know their limits for such things until in the midst of them. And really, by then it’s too late
Like I said, what we’ve done in our remodel has been valuable and will hopefully turn out to be quite profitable when we decide to sell someday. Most of that is based on the fact that hubby has been able to do the work himself. I don’t recommend it and anyone I know looking to do work I would advise accordingly. I’m not an expert on housing. I’m not even close to being an expert on fixer-uppers. I can just say what has worked for us and how.
Designing and renovating a home and bringing it to life in your own unique way is very rewarding. It’s fulfilling to see the fruits of your hard work and labor. It’s also stressful, time consuming and energy draining. What we had to decide as a family was what are our priorities, what are our goals, and how do we best meet those things. And for us, this fixer-upper and what we’ve put into it was our answer. Not an answer everyone else would come up with but one that has worked well for us.
This post is part of a writing project headed up by Rocket Finance exploring different aspects of the sub-prime crisis, lending practices, and foreclosures, and is my own musings on taking on a risky fixer-upper. Visit Rocket Finance on Friday for Home Finance: all you need to know about home ownership, a carnival of entries in this project.
Other posts in this project so far can be found at
My Thoughts on this Whole Mortgage Crisis and Why I don’t Feel That Bad at My Two Dollars
The We Can Afford the Payments Mentality at I’ve Paid For This Twice Already
Should I Invest in the Stock Market or Real Estate? at Millionaire Money Habits
What is Debt To Income Ratio and Why Does it Matter? at Moolanonmy
Why We Have an Adjustable Rate Mortgage at My Dollar Plan
Ana questions the process of paying off credit cards with a HELOC at Debt-Free Revolution
Plonkee Money shares her thoughts with American Sub-prime Crisis Should We Care
Mrs Micah shares her thoughts on Why Renting is Right For Us Right Now
SingleGuyMoney shares this excellent post about The Real Cost of Home Ownership. Something everyone should read before buying!
And check out this FABULOUS post from Being Frugal where she shares 75 Frugal Hacks for Your Home