Fixer-uppers can be complex and require real planning. Big gains in short periods of time always have big risk. Many real estate agents and Realtors say many buyers have trouble seeing the potential in a fixer-upper. It is more than getting a good deal on a property. It is also knowing the market timing. Falling in love with the potential of an investment property can cloud judgement. It may not be as simple as adding fresh paint or glossy new granite countertops.
You need a good agent that will sit down with you before touring homes to talk about easy fixes vs. things that could be prohibitively expensive or unsafe. Setting your expectations in the search of a potential investment property, knowing your costs in acquisition, holding costs, bids for work needed to get the property in salable condition, cost of selling the property, and how much work you, the client, are willing to do.
Understanding things like ugly paint, dirty carpet, drywall damage, general cleanliness and ugly landscaping are all fairly easy fixes, adding that ripping out smelly carpeting isn’t expensive in the long run and can mean a much better price. However, a strong sewer smell permeating the house is probably a bad sign. That could indicate a sewer line break under the foundation, which could be a major expense. You need to recognize those other red-flags to just say no and pass on them. In fixer-uppers are signs of major water damage, exposed active wiring, or sizable cracks in the foundation or walls are good examples.
Fixer- uppers are probably not a good place to start for First-time home buyers. Most can handle the payments, but many don't realize the costs involved in doing the repairs or remodeling. You might be looking at $4,000 to $8,000 to replace (a central air-conditioning system) as a rule of thumb, as an example. On a tile roof, the tar paper only lasts 16-20 years. Now you’re talking $7,000 to $15,000 to replace the underlayment on the tile roof. There's a lot of the cost is related to the labor.
Potential buyers should always know the year the house was built and whether it was updated. Even houses built in the 1960- 1970's could have potential electrical problems if the homes contain solid-aluminum wiring. You want to know the age of all the major components in the house and get any "documentation” on them. If structural issues exist, then find another property. Getting a good and experienced home inspector is paramount to finding all or as many inherit defects in a home. Home inspections generally start around $300 and rise based on a home’s square footage.