Have you been thinking to yourself, “Should I buy a fixer-upper for myself or as an investment property?” You’re not alone.
While it’s still a Seller’s Market, defined as having zero to three months of inventory available, we are seeing a transition to homes staying on the market longer, especially homes that need moderate to significant renovation. When buying a fixer-upper, there’s a lot to consider but the rewards can be worth it.
To Flip or Not to Flip
Home repair and DIY shows have popularized the house renovation and flipping business, enticing ambitious buyers. However, the renovation prices quoted on the shows are not typical. While fixer-uppers can be an excellent investment choice for some, we all know nothing is as easy as it appears on TV. Here are some of the best practices from professional fixer-uppers:
Know the neighborhood market dynamics. Data is your friend. Understand the recent sales prices, time on market, special local taxes and detailed property assessments of comparable properties in the neighborhood.
Look beyond the surfaces. Many imperfections that turn people off—peeling paint, worn carpets, or dated fixtures—are easily correctable, and a great fixer-upper opportunity.
Contractor availability. Make sure to use a licensed and insured contractor. Get bids from three contractors. Review them closely to make sure that they are quoting the same items. Contractors in the Bay Area can be extremely busy so expect that you may have to wait a while before your preferred contractor is available. You may have to rent a place during the renovation in addition to paying the mortgage on the property being renovated.
Know Your Limits: Renovation projects come with many challenges. Sometimes you can handle those challenges, but other times it’s best to hire a professional. Are you available to act as the project manager or should you hire someone to oversee the project on your behalf? Working a busy schedule while making hundreds of remodeling decisions is overwhelming for some, especially when trying to balance family life, friends and downtime of your own.
Location, Location, Location: A home’s value can either be improved or hindered by its location. Do your research and visit a home multiple times throughout the day. Learn about traffic patterns in the area, local school quality, recent housing market information and the overall appearance of the other homes in the neighborhood.
Of course, a qualified real estate agent knows the market and can introduce you to contractors. If you have questions on any of these items, please feel free to reach out, I love talking about opportunities in real estate.
If you know of anyone looking to make a change, please don’t hesitate to reach out. I would be happy to provide them excellent service.