Photo: Credit to the owner
Few years ago, buying fixer upper homes were all the rage. One reason is because it offers the opportunity to purchase a home for a cheaper price. However, it’s also important to consider all the facts surrounding this type of home. Doing so can help you better prepare financially and avoid potential problems down the road. Here are some myths and facts you should know before you purchase a fixer upper home.
Myth # 1 There’s no need to get home inspection since I already know all the repairs needed for the home
Fact: It is easy to identify obvious cosmetic defects in a home. There’s a big possibility though that there are also hidden structural defects that might escape your notice. These major repairs can unexpectedly become financial burdens to you. Getting a professional to do the home inspection will not only give you an idea about all the defects in the home, but also an estimate on how much it will cost you to do these repairs. The home inspection cost can potentially save you from spending much larger money on a house that needs major home repairs.
Myth # 2 I can buy a fixer upper at a very low price, fix it up, then sell at market value price or more
Fact: When you buy a run down house, the asking price will already be set to a lower than average market price so that you’ll have enough savings set aside to do the renovations. When you plan to sell the home later on, you’ll have to list the home at a price that covers all the calculated costs for the repairs. So make sure not to get carried away when you update the home or else you won’t regain your investment.
Myth # 3 After fixing the house, I can sell it more than double the price
Fact: The market dictates the price for your home. Your home will only sell depending on what most buyers are willing to pay no matter how much you spent on upgrades and repairs. Aside from that, there are also many factors that buyers consider before purchasing a home. Some of it are the location, surroundings and amenities.
Myth # 4 There’s more money in turning a single family home into a multi-family unit
Fact: Most places implement zoning laws that regulate the maximum occupancy in the area. This law can also include limitations on the size and design of new homes, as well as additions to existing homes.
Myth # 5 It’s more profitable to buy a fixer upper in a less popular location than pay for more expensive ones in desirable neighbourhoods.
Fact: One of the first thing home buyers consider is location. It’s because the location will have a large impact on the home’s value. When you choose to buy a fixer upper in a location of high demand, it will cost you more money at first but the return on investment will be higher as well.
Buying a fixer upper home is very appealing for many buyers because of its cheaper price. It’s important to remember though to thoroughly research about it and run the numbers to make sure that buying this type of home is a good investment for you in the long run.
If you have any questions or need help buying a home, I can help. You contact me at 647-834-9928 or send an email to email@example.com