Buying a fixer-upper home can be a great way to save money and customize your living space, but it also comes with its own set of challenges. Before purchasing a fixer-upper, you should consider the following three things:
1. Budget: Determine your budget not just for purchasing the home but also for the renovations, carrying costs, labour costs, and materials for the repairs that will be necessary. Make sure you have a clear understanding of the costs involved, including the above plus unexpected expenses. It's wise to add a contingency fund of 20% to your budget to account for unforeseen issues that may arise during the renovation process.
2. Inspection: Before buying a fixer-upper, it's crucial to have a comprehensive home inspection conducted by a qualified professional. This inspection will identify how good 'the bones' are, and the extent of repairs needed and any potential structural, electrical, plumbing, or other issues that may not be immediately visible. The inspection report will help you make an informed decision about whether the property is a sound investment.
3. Skills and Time Commitment: Consider your own skills and the amount of time you can realistically commit to the renovation project. If you have the necessary skills or are willing to learn, you may be able to tackle some of the work yourself, saving on labor costs. However, be realistic about your abilities and be prepared to hire professionals for tasks beyond your expertise. Additionally, understand that fixing up a home can be time-consuming, so be prepared for a potentially lengthy renovation process.
In addition to these three key considerations, it's also essential to understand the local real estate market, know the zoning and permitting regulations in your area, and have a clear vision for the final result of your fixer-upper project. Taking the time to thoroughly assess your budget, conduct inspections, and evaluate your own abilities and commitment will help ensure that buying a fixer-upper is a successful and rewarding endeavor.