Before You Fix Up the Fixer-Upper
Your DVR is full of home improvement shows, you’ve got the soul of Bob Villa, and a masters degree from YouTube University. Now that you finally ready to buy that fixer-upper home, you have an outlet for your DIY ambitions. But there’s one more checklist you need to go through before you get started.
The bones and guts
Have a professional check the structural integrity, electric wiring, and plumbing before you buy. You should also check to see if there’s any lead paint or asbestos that you’ll need to have removed. That’s going to give you a much better idea of how much work you need to do and how much it’s going to cost.
DIY or contractors
You’re a pro when it comes to painting and installing new bathroom fixtures. But do you really trust yourself to rewire the house? Be honest with yourself when it comes to your capabilities and which home improvement projects you can do yourself. You (and the fire department) will be glad you did.
Paying for it
Sure the initial cost is usually cheaper on a fixer-upper. But how are you going to pay for the repairs? You can apply for a 203(k) loan through the Federal Housing Administration to finance your repairs. If this home is your investment property, you’ll need to keep looking for financing. This loan is only for people who plan on living in the home, so it’s a good option for first-time homebuyers.
Is the house livable?
If the answer is no, remember you’re going to need to factor in rent or a second mortgage into your expenses. Even if you can live in the house, your patience might start wearing thin when you’re washing your dishes in the bathtub or camping out in the living room.
Are you thinking more granite counter tops or attic additions? Check with the homeowners association and your city’s permitting office (especially if your home’s historic) to make sure you’re allowed to make the changes you want. And remember, no one likes a showoff, so don’t outdo your neighbors!
Is it worth it
If after your repairs are done you’ve spent $300,000 on a house that’s only worth $200,000, you might not have made the best choices with your repairs. Do your research and talk with some real estate agents about what repairs will get you the best return on your investment.
Your idea of a perfect weekend is spackling the walls, installing a new sink, and--if you’re really feeling crazy--refinishing the floors. But if the idea of home improvement gives your partner a mild panic attack, you’re going to need to make some compromises. Have a conversation ahead of time about what each of you expects during this whole adventure.