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One man’s money pit is another’s DIY project, but is a fixer-upper really right for you? Understanding the complexities of buying and renovating a fixer-upper can help you make the right decision about whether or not to buy a home that needs TLC.
Thinking about buying a fixer-upper? Despite horror stories, it’s not always a bad plan. You just have to have plenty of extra cash and a solid game plan.
Creative people love the idea of a fixer upper. They watch home renovation shows, compare paint samples, and live for fabric swatches and DIY tile jobs.If you buy a fixer-upper, the potential is there to transform it into your dream home. You can customize it and change things until they suit your vision.
Taking a close look at a fixer-upper will reveal where your money is most wisely spent. That might be adding a bathroom, renovating a kitchen, or simply putting in all new flooring followed by a few coats of fresh pain.
If you choose wisely and spend your money carefully, you might be able to increase the overall value of the home beyond what you put into it. If you want to flip for resale down the road, this means you could end up turning a profit. At the same time, you’ll only pay property taxes starting out based on the price you paid for the home.
Of course, there are caveats that come with the idea of buying a home that needs work. You could find yourself rapidly in over your head.
If the fixer-upper, like many, isn’t move-in ready, you’ll have to consider housing costs for you while you do renovations. If you haven’t sold your other home yet, this may seem like no big deal, but if you have to live out of a secondary rental or hotel costs can add up.
If You’ve purchased a fixer-upper, you may have to come up with all the renovation expenses out of pocket. Getting another loan to cover them is an unlikely scenario. Calculate how much you think it would take to get the house livable or saleable, double it, and you might be somewhere in the ballpark. These things always cost more than you think, and running out of funds halfway through can leave you in a lurch.
Unless you luck out and are able to renovate in such a way that you significantly increase the value of the home, buying a fixer-upper can have a low return on investment. This is particularly true if the house is in an undesirable neighborhood. It won’t matter how hard you work to make the home inviting if no-one wants to live next to the airport.
Fixer-upper homes can be a risk that pays off, or one that drowns you in debt and regret. Think carefully before making your decision and make sure you get a thorough home inspection so you don’t uncover dry rot with the first swing of a hammer.
We’ve fine-tuned the preapproval process to make it one of the easiest experiences you’ll have in the whole home buying process. Buying a home should be fun and exciting, not stressful. Get preapproved today!
Sammamish Mortgage has been in business since 1992, and has assisted many home buyers in the Pacific Northwest. If you are looking for mortgage financing in Washington State, we can help. Sammamish Mortgage offers mortgage programs in Colorado, Idaho, Oregon and Washington.
Contact us if you have any mortgage-related questions or concerns. If you are ready to move forward, you can view rates, obtain a customized instant rate quote, or apply instantly directly from our website.
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No Obligation and transparency 24/7. Instantly compare live rates and costs from our network of lenders across the country. Real-time accurate rates and closing costs for a variety of loan programs custom to your specific situation.