Buying a fixer-upper presents a compelling alternative to purchasing a move-in ready home. When done correctly, it offers substantial cost savings and provides the opportunity to customize the home in ways you might not have initially considered.
Before committing to any property purchase, specific factors require careful consideration. Explore our latest blog to learn how to ensure you are securing a favorable deal when buying a fixer-upper in Kansas City!
Scope Out the Neighborhood
Assess the market conditions. Is the property you’re considering susceptible to depreciation? Examine the market trends of neighboring homes. Compare the prices of similar properties with the total cost of your home plus repairs. Incorporate an extra 10-20% for unforeseen expenses during the renovation of a fixer-upper to ensure thorough preparedness.
Be Honest About How Much Work You Can Do Yourself
Realistic After-Repair Value
You won’t necessarily recoup every dollar you invest. Spending $50k on upgrades doesn’t guarantee a $50k increase in your selling price. If you’re flipping a home, exercise caution and avoid excessive spending on upgrades that may not yield a significant return. Focus on what makes the home livable or not, make repairs that will add value to the home, without breaking the bank.
Essential Fundamentals Checklist
These are essential elements to examine when inspecting a fixer-upper or any home on the market. If you detect issues in any of these areas, make a note and delve further into your investigation. Prior to finalizing your offer, ensure a comprehensive home inspection is performed to catch any potential oversights.
- 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 are not functioning properly, the expenses for repairs can accumulate swiftly. Take this into consideration when determining your purchase price
- Plumbing. Plumbing problems can have widespread implications for the entire home. Ensure that a minor leak isn’t indicative of underlying issues with the pipes or plumbing system.
- Electrical. Address electrical issues promptly to avoid potential safety hazards. While electrical repairs may not be as costly as some others, it’s important to be prepared for associated expenses.
Take caution when buying a fixer-upper, or any home in Kansas City. Make sure you do your homework and are fully aware what it will take to turn your fixer-upper into a dream home!