One of the ways in which many people prefer to buy a home is to get one that is relatively old and has a number of defects, and then renovate it. This is an easy way to buy a home cheaply which makes it suitable for people who might not have access to a lot of money. In addition to that, you can also choose to have the home renovated slowly over time, thus spreading out the cost of the process. This will result in less financial strain, and you could even depend on the cash you save to carry it out.
However, you also need to keep in mind the fact that things can get very complicated if you are not careful about how you do this. You may end up buying a home that is simply unfixable, or which will turn out to be very expensive in the long run. There are many people who invest in fixer-uppers, only to find out later that it would have been cheaper to simply buy a new home instead. In order to avoid this, there are a few things you ought to keep in mind when you are thinking of going down this road. These include:
Have an idea of the type of home you want
You can’t simply find an old home and then buy it to renovate it simply because it’s cheap. Remember, even if the home is run down, you are likely to spend a significant money on it, and you will probably live in it for quite some time. By the time you are going shopping for the home, you should have a basic idea of the type of home you want. For instance, if you intend to have a large family, your main preference would be to get a home that has enough space for everyone in the family. Buying a home that does not have enough space would not be a good deal, even if you got it for next to nothing.
Do you have a financial plan?
Renovating a home can cost quite a bit of money. You may find yourself spending upwards of $50,000 on the project in many cases. Simply buying a fixer upper because it’s very cheap should therefore not be done. By the time you decide to buy such a home, you should have a plan in place to pay for the repairs you need. The important facts to keep in mind in such a case include:
• You should know how much it will cost: It’s very important to get an accurate quote for the renovation. This can only be provided by a high quality contractor who has been in the business for a long time. The importance of an accurate quote cannot be stressed enough, since it will help you budget for the whole project. It will also help you figure out whether that particular house is worth buying or not. If the home is in a very dilapidated state and you need a lot of money to put it back together, you would rather not buy it particularly if you can’t afford it.
• You should have a source of funds ready: A common problem that many people have when buying fixer uppers is buying the house and then getting stuck with it due to lack of funds to repair it. In such a state, you might not even be able to sell the house or remortgage it. Once you have decided that you are going to invest in such a home, you should have a solid idea of how to fund the renovation. This can only be done if you are sure of how much you need to get it done. Some of the sources of funds you can rely on include your savings as well as other loan products you might have access to such as a personal loan.
Be sure of the soonest you can move in
Once you buy the home, how soon can you move in? Will this be convenient for you? How soon you can move in is usually a function of several things. These include how much money you have to spend on the renovation, the type of contractor you use to do the renovation as well as the initial state of the house.
For instance, there are some houses which have most of the basic systems functioning normally. This means that you can move into them, and then fix it while occupying the home. However, there are other times when the house will be in such a bad state that you will not be able to move in without first fixing it up.
Well, if you buy the latter and then have a hard time fixing it up, it means that you will have to find somewhere else to live in the meantime.