It looks so simple on TV: Find a diamond-in-the rough with “good bones,” hire a few telegenic workers, perhaps squabble with your significant other about the interior paint color and presto – the home has doubled in value. The reality, of course, is not so easy. Here are a few things to consider before investing your money – and time – in a fixer upper.
1. Can you afford it?
After consulting an experienced building inspector to assess the home, a contractor for a time and money quote on the work to be done, and a Realtor to make sure the renovations are in line with what buyers want, do the math. Be sure to include materials and add an extra 10-15 percent for renovation “surprises” that may arise. Once you have the general price tag, you can calculate whether you have the funds to cover the cost of renovation or need (and are qualified) to take out a renovation loan.
2. Do you have the time?
Even if you plan on hiring contractors to do most of the work, coordinating with with them still takes a big chunk of time. If you just started a job, are expecting a baby or simply don’t want to commit the necessary hours to the project, it might not be prime time for a fixer-upper.
3. Do you have skills? (Or handy friends?)
Doing the labor yourself can save you money. A lot of renovation work, especially cosmetic projects, is not rocket science. But if most encounters you’ve had with power tools have ended at the ER, it may be best to go with a contractor.
4. How do you feel about living in a construction zone?
Unless you’re able to live elsewhere during renovations, think long and hard about whether living in an unfinished house, complete with workers and a power tool soundtrack, will drive you nuts.
Before you dive into a fixer-upper, talk with a Realtor who can help you identify promising homes and emerging neighborhoods where you might get the most bang for your building bucks.