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This Old House - Do-it-Yourself

Work Or Money? 4 Ways To Decide Between A Fixer Upper And A Higher Price

Written by Posted On Friday, 14 July 2017 20:50

Fixer uppers are increasingly common for home buyers to consider, but they are not for everyone. In a housing market seemingly dominated by renters and higher priced housing, it’s worth considering if you want to pay more money for a home that is either new or already renovated or if you want to purchase a fixer upper that requires ample time and money to improve it to your satisfaction. Below are a few ways you can make that decision.


Explore Your Financial Abilities

When you think about the differences between fixer uppers and already renovated homes, you may realize that the end result will be a similar property value in both cases. However, many people who pay for a fixer upper get a loan for the purchase of the home, and they pay for the renovations out of their own pocket. Otherwise, they take out a second personal loan that is not secured by the home. There are some renovation loan programs available, but these may be challenging to qualify for and come with a higher interest rate.


On the other hand, with property values soaring in Boston and surrounding markets, a fixer-upper may be the best you can afford. With this in mind, you can see that you need to have the right financial situation in place to pay for renovations. You should also keep in mind that renovation costs are not fixed. Many people pay far more for renovations than they planned on. The last thing you may want is to start a renovation and be unable to finish it because of a lack of funds.


Determine Your Ability to Tolerate a Renovation

Any time you move into a new home, you will incur stress. Moving may be beneficial in the end, but the process can be time-consuming and stressful. A renovation adds to that stress. You may stress about the project being completed on time, the possibility that you will exceed your budget, and even the need to live in a hotel or with family or friends for a period of time. The state of upheaval in your life can seem never-ending when you are in the midst of a renovation. You should examine all aspects of your life, including your professional and personal life, to determine if you can tolerate this additional stress right now.


Examine Your Skills

You should also think about your skills associated with renovations and remodeling. While many people will hire a contractor to assist with renovations, some people prefer to tackle specific projects on their own. Some do so to save money, and others do so to put sweat equity in the home or for pride of ownership. It takes considerable skill to create professional-looking results in your home, and the quality of the work will affect your final property value. If you’re looking into DIY work, you may want to look at videos, tutorials, or even courses like Success Path that can teach you how to do your renovations efficiently and effectively.


Think About Timing

It is also important to think about timing. A renovation may take two to four months or longer in some cases. Think about all of the holidays, birthdays and special events that will take place during this period of time. You may have a vacation or an extended business trip planned during this time as well. There are some cases when it is simply better to be settled in a finished home right away than it is to live in a state of upheaval for several months.


Timing will also come into play when looking for your next potential home. It’s important to be wary of seller’s markets because of the high property values and the overwhelming demand. When you’re looking to buy a house in a fast moving and high demand market, you have to be ready to make a quick decision. One out of every three houses is selling in under 30 days in some areas, which is faster than ever before. This means that you may not have a lot of time to inspect and plan a home for extensive renovations. In some cases, taking a higher priced home might be a simpler option.


Fixer uppers are great for some situations, and they may even be required if you want to get into a specific neighborhood with your current financial state. However, they are not right for all situations. Be honest with yourself as you examine each of these points, and you will be able to decide which path is best for you and your family.

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