Fixer-Upper or Pocket Book Buster?

A Good ProspectBuying a fixer upper can be a great idea, and can also provide a source of income as a rental property. or capital appreciation following completion of a succesful sale. The key to remember, however, is to not get in over your head in the remodeling arena. Buying a fixer upper means that the buyer purchases a property that requires varying amounts of modifications before it can be resold. The amount of modifications required can either be a source of a larger amount of income or a bigger headache depending on the skill level of the person doing the work. Be sure to understand all of the needed repairs and changes before purchasing a fixer upper.

Determine the amount of money available to spend on the purchase and modifications of the property. Create a budget to be able to keep within the financial limitations of the situation. Most fixer upper properties have unforeseen expenses so keep that it mind when creating the budget. Look to get pre-approved for a mortgage before you go looking for a property. Remember that the purchase of the home will also include various closing costs that must also be included in the budget.

Verify the location of the property. Check to be sure that the area is safe and free of any environmental circumstances that could make it difficult to sell the house once it has been fixed up. The property can be changed into a beautiful home but if no one wants to live in that location, it might never sell.

Look for a terrific neighborhood and then find the lowest priced house in that area. This will enable the refurbished house to sell at price in keeping with the rest of the properties. Purchasing a property at a higher end will not provide the greatest amount of potential income possible.

When a good fixer upper property has been located, make an offer on the house. Be sure that the offer can be withdrawn if the property does not pass an inspection by a reputable, certified contractor. Keep to the price you offer. If it is not accepted, look for another property.

Weigh You OptionsChoose a certified contractor to inspect the foundation, roof and structure of the property. The plumbing and wiring should also be inspected. This will involve costs but is a necessary step to be sure you are aware of the amount of work that is required to fix up the home. Have the contractor check for mold, pests and radon as well. The results of the inspection will provide you with the information you need to make an educated decision about purchasing the home or stepping away from the property.
 
 

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