But luckily, there is always a place on the market for old homes that just need a little love. These fixer-uppers can be a great, affordable option for a starter home. Follow these five tips to help you find an affordable home and ensure you don’t purchase a money pit.
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Invest in an inspector.
Fixer-upper or lost cause? When looking to purchase a house this is a very important point to distinguish from one or the other. It’s okay to look for potential when touring a house, however make sure the possibilities aren’t overshadowing some of the home’s critical issues. Deciding whether a particular home is in too much disrepair, is where a home inspector comes into the picture – they will cover the entire home from foundation to roof. Once they are finished with their inspection, they will give you a report of items in the house that aren’t up to code, things that are in ill-repair, and any causes for concern. After you receive the report, it will be important for you to decide whether the needed repairs are over your head or within budget. Some to-dos on a home’s repair list that might make it a DON’T are:- Foundation repair
- Roofing or siding
- Heating/cooling systems
- Sewage/septic systems
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Location, location, location.
The first rule of real estate, location is everything. The second rule of real estate, everything is location. The third rule? Well… you get the point. The biggest benefit of buying a fixer-upper is to get the best bang for your buck. Restoring an old home to its former glory greatly increases its value, but if it’s in an area with little attraction, should you ever decide to sell, you’ll find yourself stuck with a home that won’t tempt any potential buyers. So before committing to a mortgage, scope out the surrounding area and ensure that it will have a positive impact on your home’s value. -
Budget out before buying.
Though you might spend less than the average mortgage on a fixer-upper home, the costs of renovations can quickly stack up against you. Before committing to a home, budget out each and every item on the to-do list. Once you have an initial budget planned, anticipate to spend even more. You’ll likely go over budget in some areas and even have other projects pop-up along the way. Having a cushion built into your budget will help you anticipate those costs. -
DIY (unless you have doubts).
Ultimately, with the purchase of a fixer-upper home, your hope is to save money. In order to do that, you will likely have to complete the majority of renovations yourself. Unfortunately, hiring out contractors to complete home improvements will raise your expenses to a point where you could have just bought a new home. This doesn’t mean you should try your hand at electrical work, but instead here are some projects that you can DIY:- Repainting
- Installing new doors
- Retiling/updating backsplash
- Adding trim/baseboards
- Mounting new outlet covers
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Make sure you have the money and the time.
While it might seem like the ideal situation to purchase a fixer-upper to stay on budget, a project this extensive can easily get out of hand in both money and time. Before purchasing a home, ensure the work that needs to be done is something you can reasonably accomplish financially and physically. It will be an investment for your future, which will be worth it in the end, just make sure you’re working with a realistic timeline.
Fixer-uppers can be an affordable option for a first-time homebuyer’s starter home, but some houses may be a larger project than others. Use these tips to purchase a place you’re proud to call home and not a money pit!
Ready to make the investment? Contact a lender or get prequalified today. We’re here to help you every step of the way!