Buying a fixer upper Is it a wise choice LR

Buying a fixer-upper: a wise choice?

Interesting for: Buyer, Seller, Rental Provider, Lifestyle

The answer will vary for each individual, depending on multiple factors, but especially the homeowners skills and experience. The following considerations are important to make when entertaining the idea of buying a fixer-upper.

Skills and experience

Potentially the most powerful factor is the skills and experience you, as the new homeowners, already possess.

Buying a fixer-upper obviously means construction work will need to take place on the property at some point in time, and being able to take care of parts of the works yourself will save you money on labour and resources. This is where tradespeople are well placed.

Buying a home that needs work, but reflects this in the price could be the perfect way for tradespeople to get their foot in the door, and capitalise on property in the future.

But for those without trade and construction experience, factor in the cost these services will add when considering the asking price of any property, and also contemplate the time frame in which works will need to be carried out.

If matters are urgent, you could find yourself forking out additional money as soon as settlement happens.

Connections - suppliers and trades

You might lack construction experience yourself, but perhaps a close family member has the skills and is willing to lend their expertise. Or maybe a friend works as an electrician and can get supplies cheaper than most.

Even just having someone who can advise you on which matters are most urgent and what can wait, can save you money in the interim, and help you prioritise cash flow.

Connections can make huge differences in renovation costs, from labour to supplies, so it’s important to think about the support you’ll have before making any big decisions.

Location of the home

The location of your prospective property will impact the timeliness and costs of any renovations you plan to undertake, so it's important to be in the know about any geographical challenges you might be facing.

Access issues can also come into play, for example, buying a property that needs some dire attention in the backyard might require the services of an excavator. Then you must consider whether the property allows for that kind of access, or if it might become an issue down the track.

Some locations are facing longer wait times on trades for major renovations and new construction projects, which could impact any timeline you have in mind.

Doing your research and ticking these boxes early, means you can buy with the confidence that you won’t run into challenges down the track.

Savings in the bank

The cost of a fixer-upper home doesn’t just stop at the purchase price. It also extends to how much you will have to spend to make the home liveable.

It’s also something that the mortgage won’t cover, so has to be considered separately and additionally to the purchase price itself.

It's important that homebuyers seek advice from professionals on what the additional costs might be to make the home safe and comfortable to live in, then consider if they can fund these renovations or changes themselves.

What it is you’re looking for in a home

If there are elements of your dream home on your checklist that you’re struggling to find in the current market, it might make sense to buy a fixer-upper that you can renovate to suit your individual needs and style. Especially if your intentions would be to make drastic changes to the existing home anyway.

It still comes down to skill, cost and time constraints too, so be sure to check those boxes first.

State of the house - health of foundations

The overall state of the home that you are considering purchasing needs to be carefully evaluated by professionals, and this is where building and pest reports come in.

Finding a reputable and recommended building report company is important to protect your asset, and do your due diligence. Most conveyancers usually have preferred contacts that they trust after years of working with them, so it pays to ask for recommendations.

These reports can often tell you if there are foundational issues that need to be addressed, and if these come up, you’re then empowered to seek informed advice about the costs of rectification.

Living situation

Finally, consider whether the renovations required to make the home comfortable for living in, would require yourself to live elsewhere in the meantime.

If purchasing a fixer-upper will save you some money in the short term, which you will then spend on alternative living arrangements while renovations happen, then it might not be worth the hassle.

Every situation is different, from the home to individual skills, to financial situations. Examining your individual circumstances will better position you to make a well-informed decision about your property purchase.

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