When you are considering buying a fixer upper house it can be a daunting task. You’ve probably heard the horror stories of someone buying one and then after they start working on the renovations, they find major problems that triple the cost of the project. If not planned for, a hit like that could bankrupt your project. If you know what you’re doing, though, buying a fixer upper can be a very profitable venture.
There are a few tips anyone should know before buying a fixer upper.
Calculate the Cost of Remodeling
One of the first things you want to do is figure out exactly how much the remodeling will cost you. Whether you plan to do most of the remodeling yourself or you intend to contract out the work to a professional, you need to know how much the remodeling will cost so you can factor that into your offer.
You’ll also need to get inspections done of the house to ensure there won’t be any surprises once the house closes. These are the inspections you should get:
- Roof Certification
- Home Warranty
- Pest Inspections
- Sewer Line Inspection
- Engineering Reports
Calculate the Fair Purchase Price
Find out the price of the house if it were in good condition and upgraded to modern tastes. From that you subtract the costs of the remodeling and upgrades. You then have a fair bid to present to the seller. Make sure to include home inspection contingencies, this allows you to cancel the sale or renegotiate repairs based on the results of the inspection.
Another thing to keep in mind when you’re searching for your fixer-upper is the location. Make sure to find a house in a desirable location, for example, don’t pick a house near a landfill. Choosing an undesirable location will sink even the best of houses. Choose a house that’s in a desirable location, like an up-and-coming neighborhood. Also look at the surrounding houses, are they well maintained? The neighborhood can make or break where someone decides to buy their house, no matter what the house itself may look like.
The house’s layout is also important when buying a fixer upper. Make sure that there is a nice flow to the layout. You don’t want a choppy layout that will require tearing down walls to open up the space. Tearing down and moving walls can greatly increase your remodeling costs.
It would also be smart to choose a house that will appeal to the largest number of potential future buyers. A 3 bedroom, 2,400 sq. ft., house is the average size of a typical middle class house size as of 2016. Looking for a fixer-upper about that size would make reselling once the remodeling is done much easier.
Rely on Sarah Bernard for All Your Home Buying Needs
One last important thing you need to help you on your journey of finding the perfect fixer-upper is having a great real estate agent. With Sarah Bernard Realty Team you have a team dedicated to helping you find exactly what you’re looking for. Contact us now for a complimentary consultation! Call 314-780-9070 now.