When a Fixer-Upper Works
Interest in investing in real estate is up. Thanks to the popularity of DIY shows, many of these interested investors are looking for a fixer-upper to get ahold of. While there are times when it pays to buy a fixer-upper, not every opportunity to do so might be the best situation.
Here in this article, we look at when it does, and does not, make sense to purchase a fixer-upper:
Simple Upgrades and Renovations
If there is a fixer-upper available that requires simple updates and renovations, this would be a prime time to jump on the purchase of the home. Many benefits can come with buying a fixer-upper that does not require much work. These situations can pay off for the buyer in a number of different ways.
Meanwhile, homes that need renovations to the foundation, any electrical concerns, and issues of plumbing should be avoided as. These are not easy fixes and could end up costing the flipper a significant amount of money. Homes that simply need cosmetic updates would be the ideal home of purchase here in this instance.
However, just because a home needs only cosmetic updates doesn’t necessarily mean the updates will be easy. There is a lot of hard work that goes into sprucing up the looks of a home.
Estimates claim that flippers can expect to shell out around $15,000 in general cosmetic improvements. Additionally, buyers should expect to spend around 250 hours of labor required when doing the work on their own. But the results can be more than worth it, especially when the home sells for more than anticipated.
Good Numbers
Another time when it is a good idea to invest in flipping a home is when all of the right numbers line up. Times like these occur when the money that is expected to be invested into the home is expected to provide a solid return. When the numbers work it can make sense consider buying.
Good Timing
Generally speaking, there are moments that are more opportune than others when it comes to purchasing a home with the intention of flipping. There are a number of moving parts involved with buying and preparing a fixer-upper. Buyers can expect to work with a number of different individuals throughout the process, from the initial purchase of the home all the through the the renovations (i.e. working with potential contractors) and selling the home once again.
Because of this, the interested home flipper will want to make sure they have the ample time available that is required for such an investment and project. Keep in mind that it is likely that the timeline of the project can get off-track. This happens when working with a number of different individuals. For this reason, it is best to ensure that extra time is built into the schedule to prepare for such instances.
Finding a fixer-upper can be a great deal as long as you are prepared for what is involved. Understand the costs and risks associated with such a purchase. And if you find one that works for you, make it happen!