Fixer-upper houses might not look like much when you first see them. But, with some care and renovations, a worn-out, rundown home can become your dream house. As a bonus, a fixer-upper can cost much less than a turn-key home in the same style, in the same area. For example, the Petworth neighborhood of Washington, D.C., you might find a fixer-upper priced at about half as much as it would cost to purchase a move-in ready home, according to This Old House online. Whether a fixer-upper house is worth your time depends on the cost of the house plus the amount of work you’ll have to do.
Superficial or structural?
The type of work you have to do on the home plays a big role in deciding whether the project is right for you. Generally speaking, a house that needs only superficial repairs, such as a new coat of paint, better flooring or a spruced-up facade, is a better option than a house that needs massive work, such as a new roof, new or improved foundation, or new walls and floors to replace those that are water damaged.
Your skill level and interest
When you look at the amount of work a house needs, think about your own ability as a handy person. If you don’t like the idea of spending your weekends painting, tearing up old carpet or supervising a team of people, going the fixer-upper route might not be the best option for you. You also want to be careful not to push your limits too much. If you know nothing about plumbing, for example, trying to replace a sink or bathtub might lead to more problems than it solves.
Figure out the cost
Fixer-upper houses can be good values, but only if the cost of buying and repairing the house is still less than it would cost you to buy a similar house in move-in condition. It’s a good idea to have a contractor with you during the home inspection so that you can get an accurate idea of how much the needed repairs will cost. Leave room in your projected budget for the project in case the repairs end up costing more than expected.
Funding the purchase and repairs
You don’t have to have the cash to pay for the repairs and renovations out-of-pocket. A type of FHA mortgage called a 203(k) mortgage is designed for homeowners who want to rehabilitate the places they live in. The mortgage can either cover the cost of buying and repairing the home or simply repairing the home.
Mortgage interest rates are still low, which means that if you see a fixer-upper with potential, now might be the best time buy it. With some elbow grease and attention, a tired old home can look even better than new in just a few months time.
Image source: Flickr