A fixer-upper is a home that many homebuyers might want in the future, but very few care for it right now. For some buyers, a fixer-upper is the only way to get into hot real-estate markets, while others enjoy the thrill of revamping an old property into a modern home.
If you acquire a property for a lot less than everything around it, you have a major advantage. However, the transformation process might not be as easy as it seems. Before you set out to do a remodel, follow the right steps to ensure the fixer-upper house you purchase is worth the investment.
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1. Compare Mortgage Rates
If you plan to take out a loan to finance your property, compare mortgage rates before you start your house hunt. Multiple factors can cause fluctuations in mortgage rates, so it’s essential to compare the rates before you determine your affordability. Studying historical mortgage rates can help you understand what shapes today’s rates and how they could potentially fluctuate.
Although the primary influencer of the mortgage rate is the government bond market, your financial health also plays a critical role. Comparing mortgage rates from different lenders will help you determine the rate each lender can offer based on your individual status.
2. Find a Fixer-Upper with Potential
Some imperfections that deter people from buying a home are peeling paint, dated fixtures, and drywall repairs. Fortunately, these issues are fixable and don’t require a significant investment.
When looking for a fixer-upper with potential, avoid places with major structural problems, such as plumbing or roof issues. These problems could require higher investments, which might not be worth it if you plan to make a profit from the property. Consider getting a home inspection done to determine what issues you might face if you purchase a specific property.
3. Work with Expert Contractors
It is necessary for contractors involved in the renovation to possess the necessary skills and knowledge to transform your home. Experienced contractors will know the best ways to fix specific issues in the house without incurring high costs.
You may need to assemble a team of contractors before you begin your project. You can judge their capabilities by looking at their past work and contacting their references.
4. Choose a Convenient Location
A property’s location contributes vastly to the home’s value. Avoid properties at a busy intersection or close to a landfill. Look for fixer-uppers in appealing neighborhoods to attract buyers if you plan to sell the property after the renovation. If you plan to live in the home, think about what amenities you prefer to have nearby.
5. Educate Yourself
You don’t need to be an expert in every aspect of the construction process to purchase a fixer-upper, but you should know sufficient knowledge. Do ample research to learn the basics, as it will allow you to make informed decisions during the renovation.
It is also important to know when you should take up a DIY project versus when it’s time to hire a professional. Go online and look for resources to learn about the different steps involved in a fixer-upper project.
Not all fixer-uppers require the same effort, time, or monetary investment. Before buying a property, consider your finances, purpose for purchase, and remodeling expertise.
