*did you miss part 1? Read it here.
You’ve found the perfect spot in the neighborhood you love. You’ve secured financing, you are ready to sign on the dotted line. Before you do that you’ll want to get the advice of service providers who have seen their fair share of triumphs and tribulations when it comes to fixer-uppers.
Mostly Cosmetic or Mostly a Disaster?
The best kind of fixer-upper are the ones that have primarily cosmetic issues. Things like painting, fixing holes in drywall, replacing carpet, lighting fixtures, siding, all things that cost less than what their return is on market value.
Sometimes a fixer-upper has light structural renovations — don’t let the word “light” fool you, they can be very costly. These are things like home additions like a bedroom or bathroom.
According to the National Association of Home Builders, remodeling investments should never raise the value of a home more than 15% above the median home value of other houses on your street.
Our service providers recommend looking for cosmetic repairs that could be combined with structural repairs. You could add a bay window where an outside wall needs to be replaced for instance. Just keep in mind not to over-improve and price your home over comparable homes in the area.
Homes with structural damage can be difficult for many reasons. It’s often hard to get a good grasp on all of the costs — and often some things come up as the renovations are underway that you might not have known about. And homes with a lot of structural repairs take time, sometimes years to complete. You should keep this in mind if you aren’t sure if you’ll be in the home for several years because the housing market will fluctuate.
You’ll want to hire a home inspector to evaluate the entire property so that you have a firm understanding of what is needed before you make an offer.
Before you make an offer — have service providers out to make bids on all of the repairs and improvements you want to have done. Once you have your estimates, you’ll want to add at least 5% for any unforeseen problems.
“Even the best contractors can’t see through walls,” says Dan Bawden, chair of remodelers for the National Association of Home Builders.
Fixer-uppers can be an excellent opportunity to get the home that you’ve always dreamed of in the neighborhood you love, just be sure that you go in with realistic expectations and all of the expert knowledge you can get before signing on the dotted line.
