While they might sound good in theory (You can save money and build that farmhouse-style kitchen of your dreams!) fixer uppers often come with some serious baggage. Are you up for the challenge?
Even a turnkey home can come with an intimating pre-move-in to-do list. But a property that's many months, thousands of dollars, and a load of sweat equity away from opening the front door to a livable space makes real estate decisions much tougher. Here, why you should consider thinking twice before purchasing that fixer upper.
1. The Home Has Major Foundation Issues.
Real estate investor, speculator, and designer Steven Jones of Better Shelter in Los Angeles doesn't scare easily. But some issues raise red flags more quickly than others. "If the house is located on any sort of hill or elevation, you’ll want to check and make sure everything is straight and level," he says. That means bringing in a specialist early on – an investment in itself – to check for any issues in the foundation, such as cracks. If something is off, that’s an additional expense that can run well into the tens of thousands of dollars – all for a very unglamorous part of the renovation. If finances and/or tolerance for construction-related aggravations preclude you from investing the bucks needed to fix these essential elements, be prepared to move on.
2. You Don’t Want to Deal With Stress.
"It's very competitive," Jones says, of the demand for fixer uppers. Competition for diamond-in-the-rough properties, especially in saturated markets such as Southern California, starts during bidding. Once the property is yours, putting together a good crew to get the job done within a reasonable timeframe and budget can also be an uphill climb, since skilled labor can be in high demand. Any major home renovation, whether it's all DIY or coordinated by a professional contractor, is bound to test everything from your patience to relationships.
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3. You Have Rigid Expectations.
"If I know they're on a limited budget and after they purchase they'll be without money to do repairs, then they have to revise their expectations," West Los Angeles Realtor Ben Lee says of clients who aren't shopping for turnkey properties. Before purchasing a fixer upper, it’s vital to think about what you can live with as is, and what you can or can't do yourself. Do research on local remodeling costs for anything that requires a professional's touch; that way you won’t have to play the guessing game as to what your bank account can handle. Years of experience have taught Jones "whatever you think your rehab budget is, take it and times two." (The same goes for your timeline.)
4. You Don’t Have Enough Time.
If you want to get the most out of your investment, DIY-ing is the surest way to save some extra bucks. While plumbing, roofing, and electrical work are always best left to the pros, relatively accessible tasks such as painting walls or removing carpets don’t require training or skill. (Just be sure to watch out for dangers associated with DIY work, such as asbestos removal issues.) Not the handiest? Even if your plan is to hire a contractor to coordinate everything, you’ll still need to spend time researching before hiring one. In other words, if there already aren’t enough hours in the day, maybe consider a more move-in ready home.
5. You’re Not Too Keen on Surprises.
From an investment standpoint, fixer uppers will always be a gamble. While it’s tempting to think the “buy low, sell high” mantra is a guarantee for a positive end result, many buyers end up underwater due to unforeseen costs and changes in market value. Staying flexible, as well as having some leeway in your budget, is essential if you’re thinking of tackling a fixer upper.