Buying a home to fix up to later live in comes with some challenges. The biggest issue is that you need to be able to see what is behind the walls and make educated guesses as to unforeseen problems and costs you will encounter. Since you can't see through walls and it is nearly a guarantee you will find some surprises when you start tearing into walls, use these tips before signing a purchase offer on a house.
Tip #1: Take a Realistic Look at Your Overall Budget
When shopping for a fixer-upper home to purchase and renovate, you must first take a realistic look at your overall budget. Not only do you need to have enough money to close on the property and make the planned repairs and renovations, but you also need plenty of cash for anything unforeseen that pops up along the way. Since some issues can be very expensive, it is advisable to have twice as much money available for upgrading as you believe you will need.
For example, if you are purchasing a home for $100K and plan to make $50K worth of repairs, it is a good idea to have $200K available. This way, if you discover the home needs major electrical, plumbing, or foundation work, you will have plenty of cash available to pay for it.
Tip #2: Consult with an Architect and Building Contractor Before Making a Purchase Offer
Unless you happen to flip houses for a living, you don't have any way to know exactly what you can and cannot do to a house. For example, knowing what walls are load bearing, what is allowed or disallowed by the local building codes, and how expensive certain changes will become, are all things those successful at flipping homes are well educated about.
Since you are looking to renovate a home for your family and aren't a professional house flipper, you should always consult with both a building contractor and an architect before purchasing a fixer-upper property. While you may have some additional upfront costs to do so, this simple step will save you from purchasing a home you can't renovate how you choose and from making an expensive purchasing mistake.
Tip #3: Work with a Real Estate Agent Knowledgeable About Fixer-Upper Homes
Finally, when shopping for a fixer-upper home for your family, things will go a lot more smoothly if you enlist the help of a real estate agent who specifically has experience with this type of property. An agent who knows the ins and outs of renovations can help steer you to the right properties and away from those more likely to end up being a money pit.Share