Millennials are constantly encouraged to get in on the property market. It’s debatable whether this is to benefit us or perhaps sellers and of course the economy. Regardless, one of the fastest ways to get on the property ladder is to buy a fixer-upper. A fixer-upper is, as the name suggests, a home that has seen better days. It might have aesthetic issues or some more deep-rooted problems. These type of homes tend to be at least a couple of decades old and were probably previously owned by an elderly person who most likely passed it onto a relative. The relative tends not to want the burden and tries to sell it off fast, leading to an absolute steal on the market. But is it really good news for those on a limited income? It will only bring you profitability if you have thought about all the considerations.
Too Expensive To Handle
It could be the case that you have bought a fixer-upper, but you are now finding out that the cost of repairing it far exceeds what you expected. If this happens, you are going to be in a bit of a sticky situation that can seem impossible to get out of. You don’t want to have a second home that you don’t live in, but you can’t do anything with. You can try to sell the home off to an investor who has the financial backing to take on a fixer-upper or you can update the home as much as you can to at least get things up to code, and save up for the rest. Be aware though this could take a while and continue to put pressure on your finances.
Have You Checked For All Potential Issues?
When you bought the house, did you check for all the potential things that could be wrong with it? Did you ensure that a survey was completed on the property before you put your money down? If you didn’t, you now need to have this done. Mainly because if you don’t, you are not going to be sure if the house is even safe to be in. For example, there could be dangerous mold, lead paint, or asbestos in your walls or ceiling, and you are going to need a company such as Environix to come and check this out. This is also going to cost you quite a bit of money, and that is why you should always have a full inspection done before you purchase a property. Of course, they won’t be able to see what’s behind the walls, but they may able to give you a bit of valuable insight.
Is It The Home Or The Area?
If you’re looking at selling the home, you might think that once you fix it up your problems will be behind you. This isn’t always the case. It’s quite possible that the home you thought was a fixer-upper is actually marked as a low-value home due to the area. Key signs include a high crime rate and poor local economy. In cases like this, you need to careful that you don’t make to many changes that will essentially outprice any target buyers. This is a mistake that beginner investors who are unfamiliar with the property and location will often make.
I hope this helps you understand a bit of what you need to know before investing in a fixer-upper. Please feel free to leave a comment if you have any other tips or suggestion.