Is a “Fixer Upper” the right choice when buying your first home?
Photo: Scenes from “The Money Pit”
Let’s face it, buying your first home can be thrilling! A little frightening, but still – pretty exciting stuff! You’ve saved enough for your down payment, with a little left over for the “unexpected” costs you may [or may not] run into. You’ve even done the right thing and become pre-qualified with a bank. You know what you can afford. You and your realtor have begun looking at the available real estate selections in your desired neighborhoods, when suddenly… a property catches your eye! So much larger than the other “affordable options,” and at a price that is seemingly under budget! You’ve just met your first “fixer-upper.”
Many a first time home buyer has fallen victim to the “more bang for your buck” philosophy. While it can be a rewarding and even profitable venture, you’ll want to keep some things in mind before traveling down that path.
- Location! Location! Location – We’ve all heard that time worn adage. There’s a reason clichés become clichés… largely because they’re true enough to stand the test of time. Many first time home buyers don’t realize where a house is located can be more important than the house itself. The house can be modified, renovated or even torn down in the worst case scenario. Ask yourself if the neighborhood in which your object of your real estate affection sits is worth the time, effort, trouble and yes – possible extra money that a “fixer-upper” may cost you.
- Speaking of “extra money” – how much do you have saved for repairs? If the house is well below your budget, this may be less of an issue. However, if the house is that far below your budget, please be sure to have a very THOROUGH home inspection done before making any kind of offer. Splurge and get two just to be sure you’re not purchasing a structurally unstable nightmare. Unless the worst case scenario applies to you and you’re just going to have it torn down. Of course then you’re still stuck with no place to live.
- Ask yourself this question [and answer in the most brutally honest way possible]: “Just how “handy” am I – really?” Whether you’re looking at a place that needs a little work or one that will need a major overhaul, the way you answer this question can change your direction quickly. If you’re a pro or someone who’s spent a lot of time working in and around construction, this is probably not quite as big a deal. However, if you’ve rarely ever had occasion to pick up a hammer, but are feeling really empowered by home improvement television shows – you may want to re-think your next move. Even if you’re related to or at least have a lot of friends who would help you, how much are you willing to ask of them? Home renovation is very hard work. It requires time, money, energy and don’t even get me started on the math skills you’ll need!
- How much “extra time” do you have in your day, week, month, etc.? Think before you answer. We’re talking about the most precious commodity we have – time. And obviously there’s no such thing as “extra time” but realistically, how much time do you want to spend after a full day of work [a point that’s made moot if you’re planning on making the house renovation your full time job] and/or other obligations. How long do you want or expect the renovation to take? The answer to this question is tied very closely to how much of the work you intend to do yourself.
- Is the house in a “historic district?” This can make renovations extremely difficult. Historic districts and neighborhood associations more often than not have regulations that must be followed. Look before you leap.
- Finally, if you’re purchasing your “fixer upper” with someone, how strong is that relationship? There are few things that will shake a normally calm, patient person like living in a construction project [possibly canoeing, but that’s a different story…]. Just sayin’…
Basically, I wouldn’t necessarily recommend a house that needs “a lot of work” to a first time buyer. That being said, one that needs a fresh coat of paint, some new carpet and maybe changing out a few light fixtures to bring it up to “livable” should be a very reasonable purchase.