Buying a fixer-upper tips for first-time homebuyers
Being a first-time homebuyer, your budget might not allow you to purchase a property that is ready for you to move in immediately. In fact, some estimates note that around 70% of people aged from 18 to 34 plan on buying a fixer-upper.
Luckily, it’s possible to improve and add value to your home with improvements. We have a few tips you should keep in mind if you are a first-time homebuyer looking to buy a home in need of major repairs or remodeling.
Buying a fixer-upper means you can potentially buy a larger home in a better location. However, you need to assess the situation realistically. At times, the low price of the home may sway you to think you are at an advantage. Yet, the cost of repairing a fixer-upper may turn out to be much more than what you anticipated. Sometimes, such homes are not financially rewarding at all, so keep your eyes open when you start browsing through property listings.
Old homes usually have poor insulation, which might necessitate elaborate construction work.
Consider the time you have at your disposal
It probably won’t take much time until you find a fixer-upper. However, the construction work needed to transform the property might take a lot of time. In fact, this is one of the reasons why you need to be adamant about choosing a good real estate agent. As a first-time homebuyer, you probably do not have that much experience with home renovations and how long they may take.
An experienced real estate agent will be able to give you realistic advice on what home you should buy based on the condition of the property and the time you have at your disposal until your move-in. Since you are probably focused on saving money, renting a home while the renovations take place is completely missing the mark. Hence, a real estate agent will know whether the investment pays off – money-wise and time-wise.
Consider your home renovating expertise
Some first-time homebuyers go into buying a fixer-upper with the idea that they will renovate it on their own. In this case, make sure that you definitely consider time as a crucial deciding factor. If you are doing things on your own or with minimal help from professionals, be sure to leave a reasonable amount of time for everything – much more than what you initially thought you might need.
For instance, you might be planning a kitchen remodel to add value without breaking the bank. But what may be in store might entail much more than changing the doorknobs and repainting the cabinets. The property might have an underlying problem with the piping, sewage, wiring, etc.
So, a fixer-upper that may look acceptable on the surface might be a bag full of problems that can considerably delay the renovation project and, consequently, the move-in deadline.
Fixer-uppers are charming, but sometimes a handful as well.
Organization is everything
So, sometimes buying a fixer-upper may be much more challenging than it seems. In most cases, people have a fixed date when they need to move out of their old home. This is why you need to be organized to a tee.
Devise a plan and stick to it, but also prepare a plan B (and a plan C). Remember, you are giving that fixer-upper a new lease on life. It is unlikely it is going to be completely straightforward or stress-free!
You can execute the main bulk of renovation work before you start bringing in furniture and make more minor repairs, finishes, and improvements after you move in. However, if you decide to renovate the fixer-upper after moving to your new/old home, be sure to estimate the duration and find inspiration for your project well before you sign the purchase contract.
Organizing a major home remodel from scratch is no easy feat. So, don’t fool yourself that you will be able to do so in a few days after you relocate.
Find a good contractor or architect that can help you plan the renovation perfectly.
Consider your budget
Budgetary considerations are a crucial aspect of deciding if you should invest in a fixer-upper. As little as half of home renovating projects stay within the planned budget. Hence, here you need to be mercilessly realistic when it comes to your budget.
Keep this in mind while you are in the process of choosing your fixer-upper. Basically, the purchase of the property should not consume your entire homebuying budget.
As you will soon see, fixing a fixer-upper is likely to be a continuous series of expenses. With an old home, you may not even be able to anticipate everything that needs fixing. Some issues pop up unexpectedly, even after you finish the remodel.
One way to go around this is to divide the money you have into two ‘funds’ – one for the purchase of the fixer-upper and a separate one to cover the renovation costs based on estimates you can devise with the help of a home inspector or a licensed contractor.
By allowing two budgets, you are unlikely to overspend on the purchase of the fixer-upper.
Do you have a place to live until the renovations are finished?
Dreaming about adapting a quaint old home to your needs may be one of your main motivations for choosing a fixer-upper instead of a ready-to-move-in home. Other people find it more convenient financially, as they can invest in repairs according to their possibilities.
However, before you start warming up to the idea of buying a fixer-upper, you should consider whether you can finance a rental where you can stay until the home is ready for move-in. So, this is another factor that may move the scales either toward you buying a fixer-upper or purchasing a ready-made home you can relocate to immediately.
By Mary Aspen Richardson