So, you’ve finally found The One, but you have a new quest: to find the perfect home. House hunting is possibly one of the most daunting challenges for couples looking to own a home of their own. Whether you were inspired by house transformation TV shows or you’re simply following a budget, getting a fixer-upper does seem like a wise choice. You’d be able to save a huge amount while still achieving your dream house. Or does that only happen on the silver screen?
There is no easy answer to that. But if you’re seriously considering a fixer-upper for your house needs, then consult the 4-point checklist below.
Are you willing to wait?
The ideal fixer-upper is located in a nice neighborhood and doesn’t require too big of a makeover before you can move in. Naturally, these kinds of houses won’t be easy to find. So, set aside enough time to visit and examine houses. Being a keen observer will serve you well when you assess fixer-uppers for a possible purchase. One thing to keep in mind while viewing the house is how much you can DIY and how much work you’ll need to leave to professionals. Stripping walls of paint or wallpaper is a piece of cake. For more difficult tasks like repairing a metal roof or fixing electrical wiring, you’re better off calling professionals.
It might take anywhere from days to months to find a strategically located house that doesn’t need too many renovations. Make sure that you have enough time to wait for the right property to come along. Also, will you have a place to stay while renovations are ongoing? If you’re in a hurry to move in, then a fixer-upper won’t be ideal.
Can you devote time to renovations?
Saving up a big amount for a house is a given for any couple or family. Many people are drawn to fixer-uppers because they think it’s a bargain. But even if you save thousands of dollars on your purchase, you’ll still need to invest additional resources. In this case, you need to be ready to spend time on planning, doing, and supervising your fixer-upper’s renovation.
Start planning renovations by figuring out what areas and fixtures need to be improved and replaced. It is best to consult an expert to know whether a structural renovation is needed. Otherwise, only cosmetic upgrades will be necessary. Be careful not to close a deal if the building requires major structural repairs. It might end up costing more than buying a new house.
Is your budget enough?
Again, buying a fixer-upper entails being prepared for surprise issues. Real estate agents estimate that if you buy an old house, you should allocate 20% of the buying price for repairs. So, if you purchase a fixer-upper for $100,000, you must be prepared to shell out at least $20,000 for renovations.
Consider available options for financing your purchase and makeover. An FHA 203(k) loan can cover the cost of the home and its repairs. There are two types of 203(k) loans: standard and streamlined. If the house needs structural repairs, a standard loan is recommended. If not, then a streamlined loan will suffice. A down payment worth 3.5% of the house’s estimated cost post-renovation is needed. You may also check out private financing options. Just remember to examine the financing contract meticulously.
Are you ready for the emotional cost?
We’ve already established that significant amounts of money and time are needed for fixer-uppers. But there is a hidden cost that we still need to discuss. Do you have a support system ready to help you when renovations get stressful? Friends and family members who can lend you a hand, or at least an ear, will be valuable in getting through the journey of transforming your house.
Another vital reminder is to keep your expectations reasonable. Watching dozens of house makeover shows will definitely set your expectations high. But you have to understand that renovations like these cost plenty of bucks. It might not be something you can DIY or recreate with a limited budget. But do not fret: you can still put a personal touch and creative spin to your own fixer-upper.
Now that we’ve covered all the important points let’s have a quick recap. A fixer-upper is for you if:
- you can wait for the perfect property or spend time looking for it;
- you have time to plan and do renovations;
- you have enough money for a makeover;
- you are emotionally ready and have reasonable expectations.