INVESTING IN A FIXER UPPER

Consider your budget – In order to determine what price you should pay for a fixer upper, it is important to estimate the costs of renovation and repair you will be spending. The cost of labor and materials should be added up. If the house requires major repairs such as electrical system overhauls and foundation upgrades, it is best to look for something else as the repair costs for these will likely not add any value to the house’s price.

Location – Location, location, location is heard many times in the real estate market and rightly so. If you are buying a fixer upper in a noisy street or close to commercial or industrial property, it is best to avoid these areas since they are likely to be low maintenance areas with chances of your property ending up in the same shape soon after you renovate it.

Home Layout – If the home has a bad layout, it may not be worth it to spend time and money just to make it look more attractive. A badly located kitchen or children’s bedroom on the opposite ends of the home are not something that can be fixed no matter how much you spend.

Home Condition – The ideal homes are those that require cosmetic improvements such as paint touchups, floor repair, drywall repairs, doors, lighting, and bathroom upgrades generally provide a greater return of investment. According to the National Association of Home Builders, repair and renovation costs should not raise the value of your fixer-upper home more than 10-15% above the median sale price of your neighborhood.