What to Ask When Buying a Fixer Upper Property

Written by Posted On Thursday, 21 November 2019 04:50
Questions to Ask Before Buying a Fixer-Upper Questions to Ask Before Buying a Fixer-Upper

Questions to Ask Before Buying a Fixer-Upper

Are you thinking about buying a fixer-upper? There are quite a few considerations to think about before purchasing a house that needs a ton of work. Buying a fixer-upper is not a bad idea. However, but as with any other real estate investments, it is essential that you ask yourself a few questions. The reference at Maximum Real Estate Exposure does an exceptional job of explaining all of the ins and outs of buying a house in rough shape.

When it comes to buying a fixer-upper, it is best to consider it as an investment. First of all, you need to check out the property. Walk through the property with your real estate agent and pay particular attention to any significant red flags. Don’t forget pen and paper - making notes of problems is vital.

You need to know your limits as a buyer. For example, if there is light coming into the roof space, you may want to think twice about taking the property on. That is unless you are a roofing contractor and have got the time and the spare cash to fix the roof yourself.

How about the foundation - does it look sound with not structural cracking? Are the major systems in the house like the HVAC on their last leg? You need to assess how many projects and their costs. Getting into something that you'll be in over your head isn't so smart.

How Much Can I Afford?

The best way to buy a fixer-upper is by using savings or spare cash that you have available. Borrowing money is a possibility, and some lenders do offer low-cost home improvement loans. But, if you are buying a fixer-upper to flip it, borrowing the money is most of the time, not a cost-effective option. Do your evaluation, but borrowing the money can end up being expensive.

However, if you are buying a fixer-upper to live in, there is no reason why you shouldn’t consider a mortgage. Remember that some loans and mortgages are subject to the property meeting minimum property standards. For example, both FHA and VA mortgages have specific criteria that must be met.

In other words, don’t go for a property that has been allowed to deteriorate too much.

And yes, sticking to a budget is a must. Even though the home may seem cheap, it is all too easy to end up out of pocket. The property must have a future.

What Skills Do You Have?

Okay, let’s be honest about it, who is going to do all the work on your fixer-upper? When you are planning to do most of the work yourself, you need to bear in mind what skills you have to make that happen.

Some projects are more complicated than others, and you could end up needing the help of a professional. This is certainly true when it comes to fixing wiring, gas, and HVAC systems. Before you part with your earnest money deposit, get an estimate for any specialist work that needs to be carried out to make the property habitable.

Also, how much time do you have available to work on your fixer-upper? You may think that replacing the kitchen is an easy project, but hang on a moment, it takes time to take out old kitchen cabinets.

It is not just a matter of getting rid of the old kitchen. You need to work carefully, so you don’t cause any damage. And don’t forget you need to replace the kitchen as well. If you would like it to like nice, that takes time.

Time is just as important as your budget when it comes to investing in a fixer-upper.

Get a Home Inspection

When purchasing a fixer-upper property, one of the most vital things you should do is have a professional home inspection. Ask yourself this question - would you want to get stuck with a property that has a significant flaw that could stop you from selling in the future? Of course, the answer is no!

Having friends and family looking at the house with you is not the same as having a professional look at things. Even most contractors are not qualified to look over the home. Never underestimate this facet of the transaction.

Before going ahead and hiring an inspector look over the most frequently asked questions home inspectors get. Make sure you have the answers you need before taking the leap.

Who Can Help You?

Are you going to do all of the work yourself? It helps if a friend or family member can help you. More than anything, having the opportunity to rely on someone with previous experience is important.

Advice is essential when it comes to fixing up any kind of real estate. It does not matter if it is a private residence or a commercial piece of real estate. You should always try to bring an experienced friend or family with you to one of the viewings as you will find their advice invaluable. They may even spot problems that you don’t pick up.

Finally, is your partner or wife going to be helping you? In that case, you need to make sure that you get along well. Working together with a partner is often challenging. You want to make sure that you are still married or in a relationship by the end of the project.

Many couples take on projects and find they can’t work together. That is not the kind of situation you want to find yourself in. You both need to make fixing up your new home or investment property a priority.

Don't Forget About Location and Other Factors

One of the significant mistakes some first-time homebuyers make when purchasing a fixer-upper is not giving any focus to the surroundings. Real Estate agents can be found screaming from the rooftops all the time how important location is not only for salability but resale value.

There is no doubt when buying a home that needs extensive work, it is easy to overlook other factors that are essential. Things like the local schools, the neighborhood, and even the road that the home sits on can impact real estate values. Make sure you get an expert opinion from a local real estate agent on how these things will affect you in the future when it comes time to sell.

Final thoughts

Yes, investing in a fixer-upper cab be exceptionally rewarding. Just make sure you think through all of the aspects of the project before you commit and get that sledgehammer out you are itching to use. Make sure you ask yourself all the right questions before pursuing a fixer-upper home.

Other Valuable Real Estate Resources

Use these additional resources to make sound decisions when buying or selling your next home.

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