Mark Brock is a fan of fixer-uppers. He bought his first in the midseventies, a circa-1935 house in Columbia, SC, that was rich in history but short on modern conveniences. “Very little had been done to it, but it was in good shape and structurally sound,” he says. It turned out to be a good investment of time, money, and sweat equity.
It takes a certain mind-set - and budget - to see the project through, and a slow market is also making more of those handyman's specials available and attractively priced.
How can you tell if a house is a diamond in the rough worth excavating? It has to do with the actual house -and with you. Here are some considerations to make when you're thinking of buying a fixer-upper.
Is the Problem Cosmetic or Structural?
Cosmetic fixes are those that would make a house prettier, like replacing unattractive awnings or painting or landscaping - “things that won't cost a lot of money and won't require a lot of contractors,” says Ilona Bray, author of Nolo's Essential Guide to Buying Your First Home. You're more likely to find these kinds of homes now, too.
But if the problem is structural, you might want to pass, especially if you're new to home repair. Fixing it will it be expensive and possibly time consuming but the issue at hand could be a sign that the house is not in good shape. Structural problems would involve anything that requires a contractor or knocking down walls, like trouble with the foundation, termites, or plumbing. These are things that should be found on a home inspection, which generally happens after you've made your bid and before closing on the house. If any structural issues are found on that inspection, think seriously about whether or not the home is going to be worth the extra cost.
Do You Have the Time?
If you're the kind of person who wants to go to the gym after work and wants your weekends free to go to the movies, then you're not a candidate for a fixer-upper. Fixer-uppers are time drains, and they disrupt your life.
But if you have an alternate place to stay while the work is being done or can continue to rent and pay the mortgage on a new place, the disruption won't be a big issue. Of course, if you're a DIY diehard and love the process of turning one thing into another, then the disruption might not bother you as much as someone who likes things neat and clean and finished.
If you're hiring a contractor, you also need time to do some research before asking for bids. That way, you'll have a better idea of what things should cost when calling a contractor and which contractor in your area is the best person to use.
Realtors often get involved in fixing houses they're trying to sell, so real estate agent might be a good source for candidates. Get at least three estimates for any work you'll need done, ask for references, and if possible go and see examples of their work. You can also ask your neighbors who they used and what they thought of the work.
Do You Have the Money?
If you pooled every last penny for that down payment, you're not going to have much left over for home renovations, so you might be better off buying a house that's livable as is. But if you have money set aside for repairs or you plan on taking out a loan, make sure you get an accurate estimate and then add another 20 percent on top of that. If you're doing everything with borrowed money with no margin for error, think again. There will be extra expenses no matter how carefully you plan.
And don't forget to factor in those extras that pop up when you're living in a disrupted space: child care, dog care, takeout, and days missed from work because you have to be at home when the contractor is there.
Expect some things to go awry and when you're budgeting for you fixer-upper, face the fact that at some point you'll probably need to call in an expert
How Solid Is Your Relationship?
Buying a house is a stressful experience. Throwing a renovation on top of that, especially for a lot of first-time buyers, isn't always ideal. “A lot of people move into houses soon after they've entered a long-term relationship,” says Bray. “That can be tough on a relationship if you're trying to figure out these difficult things that have big implications for your finances and how you want to spend your life.”
If you're single and still want to fix up an older home, make sure you have a network of helpers and never do the work by yourself. “The other person's perspective is invaluable in figuring the best way to attack and complete a project, and by using a checks-and-balances system you ensure you're not skipping steps and you're using the right material - and you're just getting some help getting the job done,” says Jennifer Musselman, author of Own It! The Ups and Downs of Homebuying for Women Who Go It Alone. “If you're fortunate to have handy family members or friends, definitely enlist their help. Just make sure to enlist the help of people you trust and know their level of experience and expertise in what you're asking them to do. Nothing could start a family feud faster than getting free help and someone accidentally breaks something or does something wrong.”
The one thing you want to make sure you don't do, whether you're single or not, is to watch the myriad of renovations shows on television and think that those dramatic and quick transformations will be your experience. Remember, that's not really reality TV, and you might end up a disaster episode. But if you plan ahead with your time, money, and resources, your handyman's special could be more than worth it.