06/28/2017
Why Should You Buy A Fixer-Upper?
Fixer-upper. A home you purchase at a reasonable lower price, but one that requires an unreasonable amount of money in repairs and renovations.
As much as possible, you need to know everything about the house. A home appraisal and a thorough home inspection should tell you what you need to know. What’s it worth?
Once you know what it needs, you need to ask whether you can afford to fix these things. Unless the house is dirt cheap, so you may or may not get your money back in home equity.
Rule #1. Buy a fixer-upper at a cost (way) below the rest of the houses in a good neighborhood. By following this rule, your improvements will bring your house up to (or slightly exceed) the value of the surrounding properties. You won’t recoup your costs if your renovations result in “too much house” for the neighborhood.
Rule #2. Find a fixer-upper with quality construction. That first house was cheap, costing less than our combined annual income at the time. But everything about it was cheap, including the materials used in its construction.
On the other hand, our second house has “good bones.” Maybe it needs lots of work, but at least the extra work will be built on a good foundation.
Rule #3. Pick a fixer-upper with cosmetic upgrades instead of major, expensive projects. Well, of course! We didn’t put lots of money into our first house. Instead of fixing the foundation or updating the kitchen, we did inexpensive things like painting, pulling out old, overgrown bushes, and replacing the carpet.
Next time you are thinking buying a fixer, follow your broker advice applying this formula: Price of house plus cost of repairs equals the average home price in the neighborhood.
Remember. You don’t fall in love with a fixer-upper or investments properties, ask yourself if this is the right decision for you.
Samy Yosef, Broker is committed to helping our readers save and achieve their financial and real estate goals. Also savings at low interest rates might apply in long run, ask me about mortgage, home loan best lower rate.
I will be very happy to advise and answer any questions related to real estate investments, purchase and selling.
HOME SAVINGS REALTY Samy Yosef, Broker 818.881.3040