With home prices reaching peak levels in many desirable communities, it’s no surprise countless families find themselves browsing lower cost “fixer uppers” in an effort to get the town, the schools and the overall suburban experience they’re craving without the sky high price tag. While these homes can be great options, there’s a lot to consider before signing on the line…
What does “fixer upper” entail?
Does the house you’re considering need some serious updates — a new kitchen, bathrooms and basement, for example — or is the work more “hidden,” like the foundation or plumbing issues? Though both types of repairs are important, it’s easy to lose steam when you’re constantly working on and funneling money towards issues you can’t see, no matter how important they are to the house. And those not-so-obvious repairs might not have the same impact on the home’s resale value as a dazzling kitchen or jaw-dropping basement.
Can the neighborhood handle it?
This might seem like an odd question, but if you’re considering building out that ho hum house to epic proportions, you might be pricing yourselves out of the neighborhood. If you plan to stay permanently, it might be less of a consideration — but if this is a “starter” home or meant to be flipped post-renovations, make sure you spend time assessing if this neighborhood could get the ask price you’d need to make the renovations worth it. If everything else is hundreds of thousands of dollars under where you’ll be, you may wind up losing more than you gain on the process.
Where will the funds come from?
Because a fixer upper will ordinarily come at a lower out of pocket cost, you’re likely saving on the down payment — but are you prepared to cover all of the additional costs? Like the home closing process, repair costs can skyrocket pretty quickly — and pretty unexpectedly — meaning you’ll need both cash on hand and reserves for whatever tomorrow brings. Make sure you and your spouse dig into your finances before opting for that fixer upper. You’ll be glad you did.
Are you handy?
It’s a simple question but one that should definitely be factored into the equation. If you’re buying a fixer upper to save on costs, will you or your spouse be ready, willing and able to tackle some of the smaller projects? Some families love a challenge and relish the thought of tearing out kitchen cabinets and floors on their own — others won’t even pick up a paintbrush! There’s no right or wrong when it comes to being a DIY’er, but it’s probably better if at least one of you has got the handyman bug (and the skills to match), at least to some extent.
Tackling a fixer upper can be a great experience for families provided they’re prepared and ready to roll up their sleeves. Weigh the pros and cons, understand your short- and long-term goals and decide if now is the time to take on renovating or repairing a home. Good luck!