Buying a fixer-upper is a great alternative to buying a move-in ready home. If you do it right, you can save a ton of money and customize the home in ways you hadn’t even thought about.
Before you purchase any property, there are some definite things you need to look for. Our latest blog will tell you how to know you are getting a deal when buying a fixer upper in Chicago!
Scope Out the Neighborhood
Take a look at the market. Is the property you are looking to buy at risk of depreciating? What are the other homes in the area doing market-wise? Take a good look at what comparable homes are going for, versus what you are paying for the home+ repairs. Add an additional 10-20% in additional costs. When renovating a fixer-upper, there are always unforeseen costs, and you want to me adequately prepared.
Be Honest About How Much Work You Can Do Yourself
So the dream home, fixer-upper needs some work, and you know exactly what has to be done. But do you know exactly how to do it? While we love a good DIY project, getting into complicated repairs and renovations without the help of a professional can go terribly wrong. One mistake, and you might be paying double to have it fixed by a pro! Don’t let HGTV make you overly ambitious! Do what you are confident in, and budget to allow yourself some help in areas you aren’t so sure about.
Realistic After-Repair Value
Dollar for dollar you aren’t going to get back everything you put in. If you spend 50k on upgrades, you won’t automatically add $50k to your selling price. If you are fixing up a home with the intent to flip, don’t over do it! Spending too much money on upgrades that you like, may be a waste of money! Focus on what makes the home livable or not, make repairs that will add value to the home, without breaking the bank.
A Checklist of the Fundamentals:
These are basics you will want to check over when viewing a fixer-upper, or any home on the market. If you notice a problem in any of these areas, it should be noted and looked into further. And before you make your offer, have the home thoroughly inspected for anything you may have missed.
- The foundation. Are there cracks, slopes? If so, walk away.
- The structure. What is holding up the structure? Is it solid and sound? If the structure is in bad shape, you don’t want to mess with it. Your repair costs are likely to outweigh the profits you see on the home.
- The Roof. When was the roof last done? Are there any signs of leaks or water damage?
- Windows and doors. Look for cracks around the door frames and window ledges. This is a sign of settling and a poor foundation.
- Heating/cooling. If the systems aren’t in order, the costs to fix can add up fast. Factor this into your purchase price.
- Plumbing. Plumbing issues can problems throughout the home. Make sure that a small leak isn’t a sign of bad pipes or plumbing throughout
- Electrical. Electrical issues should be checked immediately as to prevent potential safety hazards. Electrical fixes aren’t typically as expensive as other fixes, but you should be prepared to spend some money.
Take caution when buying a fixer-upper, or any home in Chicago. Make sure you do your homework and are fully aware what it will take to turn your fixer-upper into a dream home!