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Buying a Fixer Up Home
How to Make a Large Return on Investment by Buying a Fixer Up Home
By Mark J. Donovan
|Buying a fixer up home is a great investment, particularly
for the DIY homeowner who has the time and money to put into the home.
However, if you're not absolutely committed in investing the time and money
into the fixer up home, think twice before buying it. Selling a fixer up
home can be a difficult challenge. In some cases, you could have an
extremely hard time flipping a non fixed up home, and you may have to even
sell the home for a cheaper price than what you paid for it just to dump it.
Before buying a fixer up home make sure to have a home inspection. Also,
call in an experienced home remodeling contractor to look at the home before
buying it. The contractor can help find structural issues with the home that
the home inspector may not find. They can also give you a rough idea of what
the most problematic areas are of the fixer up home and how much it may cost to
repair and fix up the home to your satisfaction.
As I've just mentioned, structural issues
with the fixer up home should be your
chief concern. A crumbling foundation or
sagging floors could cost you many tens of
thousands of dollars to repair. Also, most
likely the fixer up home will need a
completely remodeled kitchen and
bathrooms. Understand up front that a
remodeled kitchen will set you back a
minimum of $15,000, and most likely much
more. Bathroom remodels can also cost you
up to several thousands of dollars or
more, depending upon the size of the
bathroom and the types of amenities you
want to see in the remodeled bathrooms.
If on the other hand the fixer up home
simply needs some TLC, such as a paint job and
various diy repairs, then the fixer up home
maybe a diamond in the rough. Rarely this is
the case, however, so you need to be fully
committed to the work and money ahead to
refurbish the home to something you actually
desire living in.
Time for Return on Investment on Fixer up Home
It's also important to keep in mind that it may take some time to recoup your
investment in fixing up a home. It really depends on two key factors: (1) the
state of the local real estate market when you attempt to sell the home and (2)
the amount of money you sunk into the home to restore it to a marketable
property. Suffice it to say the more money you put into the fixer up home, the
more difficult it may be to make a positive rate of return on your investment in
a reasonable timeframe. This is why it is so important that you don't buy a
money pit when looking into buying a fixer up home, and that you're truly
committed to being a DIY homeowner to make the many repairs and improvements to
the home yourself. If you subcontract all of the remodeling and repair work out
to various contractors, chances are it could take years to recoup your
investment in the fixer up home, unless your local real estate market
experiences a sudden boom.
So before buying a fixer up home, make sure you know what your buying and
have a plan, and estimated costs, in place before making the commitment. There's
a reason why fixer up homes are often listed in real estate magazines as a
"Handy Man's Dream". There's no truer words written so be cautious.
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