If you're on a budget but still want to purchase a home, chances are high you will want to go for a "fixer upper” and generate sweat equity. After all, these types of homes can have a lot of potentials if you're willing to put in some elbow grease. And while the renovation process can be fun and teach you a lot, it's certainly not for the faint of heart. There are a lot of things you might discover during the process, and that can be quite overwhelming for the novice property owner. For instance, after purchasing a property to fix up, some unfortunate home buyers had found garbage and scrap metal buried out in their yard.
Of course, you probably wouldn't anticipate finding hidden debris or even latent damage in your newly purchased property but those are very real possibilities when buying something for a bargain. This is why it's important to go into any fixer-upper purchase with as much knowledge as you can gather. Below you'll find some of the most important information you should know before ever signing on the dotted line for your home.
Look at the Neighbourhoods
If you're looking for a home to fix up, you should start by looking at the neighbourhoods that you like and are attractive to others as well. After all, you can fix a home, but you can't do anything to fix a neighbourhood. The majority of fixer upper homes are going to be in older, more established communities in throughout your city. Homes in quiet communities such as Silverado in the suburbs of Calgary typically consists of newly built homes with modern architecture. These types of properties rarely require major renovations that you may be able to capitalize on.
Budget for Repairs
If you're considering a fixer-upper, you need to budget for the repairs to get the most out of your real estate investment. For example, you might need to replace some parts of the plumbing system just to take a shower or you may need to upgrade the electrical panel for safety reasons.
The extent of the repairs and issues is really going to depend on the condition of the home. Be realistic about the cost of what's ahead for you and make sure you always have MORE than what you budgeted for (trust me it will come in handy). Also, make sure you have a thorough home inspection done so you can avoid homes that wouldn't be worth the effort of fixing up. For first time home buyers, typically these types of projects are not recommended as are many steps along the way that a home buyer needs to prepare themselves for.
Contractors vs. DIY
Another part of budgeting for repairs is figuring out how much work you will do yourself and whether or not you hire a contractor. Of course, a contractor is going to cost you more, but their service is crucial to getting work done the right way. For example, a contractor will be the only person who can fix a cracked foundation or do electrical re-wiring.
Stress and Time
You may not be able to comfortably live in your home until you fix it up, and that can be stressful for you and your family. Make sure everyone is fully aware they aren't moving into a turn-key home and that a lot of effort is going to be required for everyone.
With all of that being said, it's easy to see why you should avoid fixer-uppers if you're not ready to put up with the hard work and stress! However, if you can deal with constant projects, a lot of noise and less than appealing living conditions, it can be just what you're looking for. In the end, it can pay off to end up with a beautiful home that looks just how you wanted.