Is that house worth a good price but in need of repairs? Find here some aspects to consider before buying a house.
The idea of buying an old property and renovating it until it becomes the house of your dreams or a source of income is attractive to many people. But that enthusiasm is also accompanied by many potential problems.
It is important that you know what you are getting into. Before opting for a house that needs repairs, consider whether it is the right type of property for you and what it will actually take to renovate it.
Decide what is right for you
- Pros and cons. Although a lower selling price, a potential for resale and a sense of personal satisfaction are possible, there may also be lots of invisible costs associated with buying a home in need of repairs.
- It takes patience. Depending on the size of the renovation, repairs to a house can take a month to a year to complete. Keep in mind that your life and that of your family could be affected for a significant amount of time. If this does not work for your lifestyle, it is better to think of a different type of property.
- Money. Renovations can be very expensive. If you are not going to have much money available for renovations after your down payment and closing costs, it would be good to consider a house where you can live while it is being fixed. No matter what you decide, remember that there will be extra expenses no matter how carefully you plan.
What you should consider when searching
- Location, location, location. It is the golden rule of real estate and also applies to homes that need repairs. Do your research. Check the average prices of homes and schools in the area. Take a walk around the neighborhood to see if the houses are well maintained. Buying the worst house in the best block you can afford can be a great option.
- Condition. This can vary greatly, from needing cosmetic repairs to a total rehabilitation of the house. If you want to minimize the costs of renovation, look for a house that has ‘ good bones ‘: a roof and solid foundations, natural light, a good distribution in the plans, quality construction and a consistent design.
- Design. Many old houses have been divided into several rooms and their design may not work for you. Although it is certainly possible to tear down walls and redistribute the spaces, this can sometimes be costly or impractical. Take this into account when you think about your renewal budget.
- Setting. Find houses that have approximately square footage and the number of bedrooms and bathrooms you want. Although it is possible to add them when renovating, the costs can really be accumulated, especially if you expand the space of a house.
Repairs and remodeling
Making a budget. When considering a property, a home calculator that needs repairs can help you get started with an approximate estimate of renovation costs. A trusted contractor can also help in the process.
Minor renovations. Add how many will be necessary. These may include:
- Patch and paint walls
- Give new finish to the floors.
- Place tiles or carpet
- Install sets of lights and switches
- Fix broken windows
- Install new kitchen cabinets or restore existing ones
- Replace doors
- Paint outside
- Add a terrace
Major renovations. Add how many will be necessary. These may include:
- Replace air conditioning systems (HVAC) or add centralized air
- Fix foundations
- Replace roof
- Install new pipes, sewer or wiring
- Replace windows
- Kitchen and bathroom remodeling
- Build garages and additions
The Federal Housing Administration (FHA) offers a 203k loan that allows borrowers to buy property while also financing the cost of rehabilitation.
Consider the finish of adjacent houses. If most have cheaper finishes, it is probably not best to spend your money on granite counters, copper facilities in bathrooms or marble floors. Your home in need of repairs should be in line – or slightly above – the standards of homes in your neighborhood.
Buying a house is probably one of the most important decisions you will have to make in your life. And although it may seem overwhelming, a house in need of repairs can be a great way to earn more for your money. Do what you need to do, talk to trusted professionals and make an intelligent and informed decision.
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