Article by Sally Norton
Buying real estate is a big investment, so you should never make a rash decision. Whether you’re planning on buying your first home or you want to go into real estate investing, you should do some research beforehand. And the main reason is that there are a lot of misconceptions out there. For example, people can’t seem to reach a consensus when it comes to fixer-uppers. You’ve probably seen some of those home renovation TV shows that make everything look easy. Well, that’s not always the case. Or you might have heard acquaintances sharing their bad experiences. And again, that’s not always the case. So, let’s look at some of the myths about buying a fixer-upper busted.
No. 1 You can find fixer-uppers at every corner
One of the top myths about buying a fixer-upper busted is that they are easy to find. While this might have been true in the past, nowadays, it’s not. And the main reason for this is that there’s a lot of competition. In recent years, many people have gone into real estate investing because it seems like an easy way to make money. And since the market is now oversaturated, you need to act fast if you want to get your hands on a good fixer-upper. You’ll also compete with prominent real estate investors with a lot of cash on hand. And cash payments are usually prioritized.
No. 2 You can skip the home inspection
One of the biggest mistakes people make when buying a fixer-upper is skipping the home inspection. They usually make this decision because they already know the property needs fixing. So, they perceive the home inspection as a waste of time and money. And this cannot be further from the truth. There are a lot of expensive problems you can miss if you wave home inspection. For example, the property might have structural issues or other hidden defects that will cost a fortune to fix. Thus, if you have an inspection contingency in the contract, you have the right to pull out of the deal.
One of the top myths about buying a fixer-upper busted is that you can skip the home inspection.
No. 3 You only have to make some minor improvements
Don’t fool yourself into thinking that you can get away with only some minor improvements. After all, it’s called a fixer-upper for a reason. And once again, the home inspection report is key. This will tell you which are the most pressing issues. So, start with the major repairs, then move on to the home updates. And try to avoid home renovation mistakes that can end up costing you even more.
Don’t expect to get away with only some minor improvements.
Fixer-uppers usually require extensive renovations.
One of the biggest home renovation mistakes you can make is being cheap. Yes, there are many inexpensive solutions out there. For example, adding a fresh coat of paint to the walls will immediately spruce up the home. And you can use low-cost decorating ideas such as framing memories instead of buying expensive pieces of art or repainting old furniture. But, don’t be cheap when it comes to the quality of the construction materials or hiring contractors. After all, quality home improvements will increase the property value.
No. 4 One of the top myths about buying a fixer-upper busted is that you can make a lot of money fast
All those home renovation TV shows make people believe that they can buy a fixer-upper and renovate it in no time. But remember that those TV shows have experienced contractors working for them. It might take you some time to find a good contractor. Plus, they might be booked for a few months. Then, if your budget is tight, you won’t afford to hire too many workers, so the repairs and updates will take longer. Therefore, getting the home ready for resale can take several months, a year, or even more. And in the meantime, you’re only pouring money into it without getting a return on your investment.
No. 5 You should only focus on the appearance
A common myth regarding fixer-uppers is that you only need to make it look pretty to resell it for profit. Well, it’s not that easy. Yes, this is one of the things that can enhance a home’s value, but it’s not enough. Homebuyers are not just interested in the pretty kitchen and bathroom. They want the hole package. So, both the inside and the outside of the property have to look good. But more than that, everything needs to be functional. It doesn’t matter that you have a modern bathroom if there’s no running water. So, make sure everything works before you place the home on the market.
To make a profit from the sale of a fixer-upper, you have to focus on both its appearance and its functionality.
No. 6 If it’s cheap, the location doesn’t matter
First of all, fixer-uppers might be cheaper than newly-built homes, but don’t expect a bargain. Secondly, in the real estate industry, there’s nothing more important than the location. So, the consultants at Evolution Moving advise you to do some thorough research on the neighborhoods before buying. Look for those with low crime rates, good school districts, and access to public transportation. All of this will increase the value of the property once you fix it up. Plus, if you’re planning on turning the fixer-upper into your home, you wouldn’t want to live in a bad neighborhood.
No. 7 You can’t get a loan for a fixer-upper
Bank policies on loans vary widely, so you should do some thorough research on this topic. However, you should know that many lenders approve loans that leave room for renovations. And the main reason for this is that after the renovations, the property value increases. So, if you tell the lender that you can double the value of the home and provide supporting data in this respect, you’ll likely get the loan.
Fixer-uppers have been a topic of debate for a long time. And many people have misconceived notions about them. So, you should never listen to everything you hear from acquaintances or on TV. As you’ve seen, there are a lot of myths about buying a fixer-upper busted. Therefore, you should get informed from credible sources to make the best decision for yourself.
Jason Gelios is a Husband and Father. After that, a Top Producing REALTOR®, Author of the books 'Think like a REALTOR®' and 'Beating The Force Of Average', Creator of The AskJasonGelios Real Estate Show and Expert Media Contributor to media outlets across the country.