Should you spend less money buying a fixer-upper or more money buying a repaired house? That is the question. While there are no simple answers to those questions, here are some tips to keep in mind when making your choice:
1. Do the math.
One of the keys to determining whether or not to buy a “fixer superior” is determining the cost to fix it. Get a professional appraiser to handle the task for an accurate appraisal. The cost of fixing up the house will vary, depending on the current state of the house. After the appraisal, you’ll have some hard data to make an informed decision about whether to fix up the house or make it someone else’s headache.
2. Choose houses that need minimal repairs.
Fixing up a house doesn’t have to require completely renovating it. It is advisable to look for houses that need a fresh coat of paint (interior or exterior), new carpeting, basic plumbing, etc. On the other hand, if a house needs major repairs, make sure it’s affordable and fits into your long-term housing plans.
3. Consider how much time and effort you have.
The amount of repair work needed for a fixer-upper can vary significantly. So in addition to determining how much work is needed, consider how much time and effort you’re willing to spend. If you need a house deliverable sooner then it might be a bad option. If you don’t have the energy to make necessary home repairs, then you should probably buy a new home.
4. Learn about the housing trend in the area.
Fixing up a house in a good location is one thing. Fixing up a house in a bad location is not such a good idea. So before you decide whether or not to buy a fixer-upper, determine whether the home’s value would generally go up or down afterward. If the latter were to happen, then you might decide that the funds needed to repair the house would not be worth it. On the other hand, if houses in the neighborhood are generally appreciating in value, then it could be money well spent.
5. Consider your long-term housing plans.
Do you want to live in your next home for years or decades? Fixing up a house can be a long and difficult process. The time, effort, and money involved may be too much if you don’t plan to live in a particular home for several years. On the other hand, the investment could be worth it if the repairs needed for a fixer-upper are basic.
6. Get comprehensive and multiple evaluations.
This is crucial when considering whether or not to buy a fixer-upper. Consider getting at least three evaluations and then calculating the average of them. In addition to getting multiple appraisals, you should always get thorough appraisals that include the roof, the floor, etc. When comparing appraisals, be sure to compare apples to apples.
Is buying a house to repair the right option for you? The tips above will help you make the best decision.