Entry #2810, September 5, 2013
Purchasing a home that needs serious remodeling is no easy decision. Renovations are time consuming, expensive, and require commitment and determination to complete. If a house hunter is seriously considering buying a home to restore, they can follow these five practical guidelines to simplify a potentially overwhelming process.
Image via: Travis Knoop
Get an Inspection
Finding a home inspector is one of the most important tasks for homebuyers looking to invest in a fixer-upper home. Be sure to read reviews and select an inspector who comes recommended by other homebuyers who have no bias toward the purchase or sale of the home. Another important step is to make sure the inspector has experience in evaluating older homes. If the inspector is only versed in newer construction, he or she may insist on excessive upgrades.
Determine Necessary Repairs
Cosmetic repairs usually require replacement of the drywall, lighting, shutters, windows and doors or refinishing of the floors, kitchens or bathrooms. The more demanding projects, however, involve structural damages in the foundation of the home. Foundation repairs are costly and may eat up a budget before interior updates are addressed. Further, mold is an issue that should not be taken lightly. Aside from the danger of inhaling toxins, surface mold is an indicator of more complicated problems in the home, such as flooding or leaks. If the house smells musty or has indications of water damage, it’s best to stay away.
Finally, if the layout of the home is undesirable, it is going to be difficult to change without completely gutting the home’s interior. Kitchens and bathrooms are problematic to move around due to limited access to pipes and plumbing. Not every wall can be torn down, either. Load bearing walls help to hold up the foundation, while curtain walls are simply room dividers. Keep these limitations in mind when imagining potential remodel layouts. It’s best to find a home that has a convenient and logical floor plan to avoid these pricey renovations.
Image via: Heydt Designs
It’s difficult to determine exactly the type of repairs that a house needs without ripping down some walls and examining the groundwork. However, this is not an option during an inspection. Often times, a new homeowner conducting renovations might find issues during construction that weren’t evident upon inspection or in the seller’s disclosure. Some of these may be minor fixes, but can also be costly and require urgent repairs. It’s best to have extra funds set aside to cover such unforeseen problems.
Consider Living Arrangements
Is there a safe place to stay while the construction is taking place? A homebuyer may want to reconsider buying a fixer-upper if the plan is to move in immediately upon purchase. Not only is it dangerous to be inhaling dust throughout the night, but living in a disheveled house 24/7 can become emotionally draining. Staying in the home can be a constant reminder of the stress, costs and slow-moving processes of large remodels. If the home is going to become the buyer’s primary residence right away, consider remodeling in phases to establish a safe, stress-free living space.
Image via: J. Stephens Interiors
Even if the buyer plans to live in the house for a few years rather than just flipping it for a fiscal return, the money and time put into fixing the home should yield a high profit to be worth the hassle of the renovations. The initial cost of the home and the cost of repairs (materials and labor) should be less than the total resale value of the house. Make sure to deduct potential unforeseen costs from the final calculation. While it’s impossible to predict exactly what the house will eventually sell for, homeowners can determine market value by searching comparable properties in the neighborhood. If the market is strong and the home is the right price before renovations, then there is a high probability for substantial returns on the initial investment.
None of these steps should be taken lightly, since a home is likely the most expensive purchase made in an individual’s lifetime. Above all, a lack of experience in home improvement can delay the renovation process. Even with professional assistance, it’s best to clearly understand all of the repairs required, why they are necessary and the reasons behind their costs. The more knowledge of home improvements the new homeowners have, the smoother and more affordable the renovation process should be for them.
Written by: Tali Wee of Zillow
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