When Does It Make Sense To Buy A Fixer Upper?
Many home buyers run into a pickle. They've found "the one"... but it needs a lot of work. Many will ask themselves, "Is it worth it?", because every buyer fears the "money pit" property. However, there are many times when that fear is not justified!
The average fixer-upper lists for almost ten percent lower than market value, according to a new analysis from Zillow — That could be huge savings, especially in a high priced market!
Should you consider buying a fixer-upper? Here are three scenarios where you might want to say "Yes!"
If the home doesn't have major issues (foundation, electrical, plumbing, etc) you can save a ton of money and do the upgrades yourself! It's not always easy, but it can seriously pay off! If you have some time to spend, and a little DIY savvy, this could be perfect for you! A couple we worked with had this to say about their fixer-upper:
"Basically, we gutted the whole drywall and repainted everything and even redid the trim. Then, we installed new cabinets and door handles, and toilets. It took some time, but it looks like a brand new house. Plus, i'm confident the resale value has gone up quite a bit."
The Numbers Add Up
“Fixer-uppers [only] make sense as long as the numbers pencil out,” says George Vanderploeg, a luxury real estate broker in New York.
He's right. You've got to crunch some numbers. A fixer-upper is an investment. If you don't treat it well, it won't treat you well! However, if you sit down with your realtor or your contractor, draft a strong plan, and follow through with it... then you've struck gold! Remember, the average fixer-upper lists for ten percent under average... if you can make it work, a fixer-upper will pay dividends!
The timing is right
You have to be aware that a fixer-upper can take time! If you're making major renovations, you may need to make living arrangments in the meantime. Also, some cities are slow to approve building permits, and that could slow down the process. Plus, you may simply be busy at the moment! If work is especially time-consuming right now, or even if the kid's karate class takes up all your time, you may not be able to manage a fixer-upper!
There's nothing wrong with a fixer-upper. Just remember that it's both a time and financial commitment! However, if you're willing to put in the work, it can really be a "home run"!