Tuesday, September 23, 2014 / by Tom Nickley
Buying A Fixer-Upper?
When you buy a home, it is usually going to be one of the most expensive purchases you ever make. However, with that expense comes a valuable piece of property that can be worth considerably more over time. When buying this home, you may want to purchase one that is considered to be "below market value." That phrase means the home is priced at much less than what it is truly worth or perhaps should be priced.
A home like this will eventually gain in value with the remodeling and fixing up that you will proceed to do. This may be a better option long term instead of overspending on a brand new house only to find your profits diminishing as the housing market changes.
Having patience is usually the key to finding a below market home that can bring you the profits you seek. Often you need to look at several aspects of the home to determine if it really can be cost effective for you. Normally such homes have not been maintained very well for one reason or another. They may have damage that is primarily cosmetic, although some will even have structural damage that you will have to pay significant amounts to have repaired. That does not mean that they can't be a great money maker for you, though, even with all the work that is involved. People who are willing to put in the time and effort can find a home that once renovated offers a substantial profit.
You also need to consider the condition of the housing market at the time you are both buying and potentially selling the house. If the market is heading downhill then buying a home that needs work may bring you more problems than what it is worth. You can put as much money as needed to make the home beautiful, but if the selling market is bad then you will not see any immediate profits.
You also need to look at what is involved in doing repairs to a home like this, whether the work is done by you or farmed out to a contractor. That includes what you will spend to fix the home, both inside and out, and how much of the work you are willing to do yourself. If you cannot do any of the work yourself, then you need to make sure that you have capable, skilled, and experienced people who can do the work for you. This means quality work is paramount! After all, making shabby improvements can be just as costly as making no improvements at all.
Lastly, you should take the time to research the neighborhood, as well as the specific home you are buying. Besides the neighboring homes, you will want to see other below market homes that are available to you. Look at the lowest price, but make sure you are not getting in over your head when it comes to the work involved. By hiring a qualified home inspector to inspect any home that you are interested in, this will ensure you are purchasing a home that at least has realistic potential to make you a lot of money.
If you're interested in seeing these types of homes, give us a call! We can help you find the best options in the greater Orlando area, and we can even connect you with local contractors that can help you turn your fixer-upper into your dream home!