Money can be made by buying cheap and selling expensive, or for a profit. There are several companies that do this in real estate. They look for housing in bad neighbourhoods that can be made to be better. They look for old properties that can be made to look newer. They look for opportunity in a property that can be built, or refurbished to make it look new, and sell it again for a profit. Flipping houses, makes fast money in real estate.
If a home needs extensive repairs before it can be lived in, it is called a “fixer-upper” and may be purchased at a lesser cost. It usually takes a lot of effort to turn a fixer-upper into a home that people can really live in, whether it’s the floor, the walls, or the roof. There could be damaged pipes, there could be other issues like simply the age of the building. Whatever the issue is, a good repair and construction team can fix them to make them new again.
Yet, there is nothing wrong in purchasing fixer upper properties. But there are still things you should do prior to purchasing one to ensure that you won’t be left regretting your decision.
What to do when buying fixer upper properties??
- Do your research about the property both before and after viewing it – Going to look at a house that needs remodelling (or any property, for that matter) when you’re not an expert is like walking into a gunfight with a sword. You need to see what needs fixing and see the detail and the cost needed, otherwise you will lose a lot of money, quickly.
- Identify your “red lines,” and keep a list of them – Finding a new place to live may be stressful, there will be situations when you’ll compromise for anything. Setting property criteria, like “red lines,” may help you already and in the future. This can be done through listing your likes, dislikes, expectations, and other things that your partner would consider in the property. There are some things that you should not compromise on, and others that you might be able to take a short cut on. Short cuts can save money, but can also lead to trouble,
- Opt for the full survey – If you are purchasing an older home, which is more likely to have structural or moisture issues, it is wise to pay the extra money and have a comprehensive Building Survey performed.
- Leverage in negotiations – In some cases, you may be able to negotiate a lower selling price with the seller if you know how much money you’ll need to put into repairs. Researching local tradespeople will give you an idea of how much repairs will set you back. That way, while negotiating a price decrease with the vendor, you’ll be able to back up your request with hard numbers.
- Avoid being emotionally invested in anything – Preconceived ideas regarding finishes and fittings can spoil your makeover. Thinking outside the box is the only way to achieve what you want on a budget, since your first choice isn’t always the best.