Buying a Fixer-Upper Home | Key Factors to Consider
How to Buy a House — Little Falls, MN Properties
A “fixer-upper” is a home that needs repairs. For example, there may be a hole in the roof; there might be problems with the plumbing; or the foundation may need to be reinforced. These and other challenges relegate fixer-uppers to a unique category of real estate. They attract a lot of home buyers, many of whom are unaware of the work involved with renovating the properties.
Below, you’ll learn about the advantages of buying a fixer-upper, along with some of the risks. We’ll also provide a few guidelines for choosing a property that other buyers will find desirable. This will improve the likelihood that you’ll be able to repair and sell it for a significant profit.
How to Buy a House Tip #1 | Advantages Of Buying A Home That Needs Repairs
In any given real estate market, this type of property is priced lower than newer homes for sale with similar floor plans. The reason is due to demand – or, lack thereof. Many people are unwilling to put the necessary time and effort into repairing a run-down house. Consequently, there is less demand for these properties than exists for homes that need fewer, if any, repairs. This has the effect of suppressing prices.
Another advantage of buying a fixer-upper is that the low prices attached to these properties introduces a high potential profit upon resale. Once the repairs have been completed, it is not uncommon for owners to sell the houses for twice the amount they paid for them.
An additional benefit involves the maintenance and repair experience that comes from owning this type of property. If you perform the repairs on your own, you’ll gain a wealth of knowledge that can be applied to your next home.
How to Buy a House Tip #2 | Choosing A Fixer-Upper With The End In Mind
Most homebuyers have one of two goals in mind when purchasing a property that needs extensive repairs. They either plan to live in it, or generate a quick profit by fixing and selling it. The majority of people lean toward the latter option.
The key to making a profit with a fixer-upper is to buy a house that will be attractive to potential buyers. Some features, such as a hole in the roof, can be fixed. Other features, such as a bad location or unappealing layout, are less correctable. Thus, when buying, keep future buyers in mind.
How to Buy a House Tip #3 | The Value Of An Attractive Neighborhood
It is possible to make a profit buying homes for sale in unappealing locations. But doing so is easier with properties located in neighborhoods that buyers find attractive. For example, houses within walking distance of small shops and restaurants are generally more appealing than those located across the street from bus and train stations. Likewise, fixer-uppers in low-crime communities with top-ranked schools in the vicinity are more attractive than houses in crime-ridden neighborhoods.
How to Buy a House Tip #4 | What Type Of Property Do Buyers Want?
There are several types of residential properties, including condos, townhouses, single and multi-level houses, and even green homes. Here, again, it is important to purchase a property that will be in demand when the time comes to sell it.
A lot of homebuyers are drawn to single-level residences that offer three bedrooms, and at least two bathrooms. Buying a fixer-upper that matches this criteria will make it easier to sell down the road. This is not to suggest you should avoid purchasing other types of residences, but realize that demand influences price. This in turn drives the profit you’ll realize when you sell the property.
How to Buy a House Tip #5 | Desirable Floor Plan Styles
Some floor plans are more desirable than others. For example, a multi-level property may have the staircase located near the main entrance, rather than to the side. Or, a home might be designed with the dining room located in between the entrance and the kitchen and bedrooms. To reach other areas of the house, one must walk through the dining room.
To be sure, floor plan desirability is largely a matter of preference. But some styles are decidedly less popular than others, a fact that will affect future demand for the property.
Buying a fixer-upper is a good way to secure an undervalued property that can be sold later for a sizable profit. But keep the above factors in mind to make selling it easier.