Buying a fixer-upper can be an extremely gratifying experience. Typically, fixer-uppers are priced more competitively than their move-in ready counterparts—plus, you get the opportunity to put your own spin on the house design during renovations.
But fixer-uppers aren’t for everyone—and before you buy a home that needs major work, you want to make sure it’s the right fit for you. According to a recent article from Realtor.com, there are five key questions you need to ask yourself before investing in a fixer-upper property, including:
- What’s my motivation? Fixer-uppers are a labor of love—and there’s a lot of labor involved. Before you buy a fixer-upper, it’s important to define your motivation, which can help carry you through the more challenging aspects of renovating a home. Are you looking to flip the home for a profit? Do you want to save money? Do you want to improve your DIY-skills? Whatever your motivation is for buying a fixer-upper, make sure you’re clear on it before you make the purchase.
- Where am I going to live during renovations? Depending on the condition of the fixer-upper, it might not be livable until well into the renovation process—so it’s important to have an alternate living situation lined up until your fixer-upper is move-in ready.
- What’s my renovation budget? Fixer-uppers may be more competitively priced—but you’ll need a hefty renovation budget to transform it into your dream home. Make sure you price out how much everything is going to cost before you decide whether a fixer-upper is the right investment for you.
- How am I going to pay for renovations? Understanding how much renovations are going to cost is the first step—and understanding where that money is going to come from is the next step. Make sure you have the budget you need in hand (whether that’s cash, a loan, or another capital source) before you buy a fixer-upper.
- Am I prepared to manage this project? Fixer-uppers take a lot of time and energy to renovate—so before you purchase a fixer-upper home, make sure you have the bandwidth to take on the project.
For the right person, a fixer-upper can be a great real estate investment. Just make sure you ask yourself the right questions before deciding if one is the right investment for you.