When looking to buy a house, it is important to not discount the homes that are in worse shape compared to new construction homes. If you are familiar with the popular “fixer-uppers” from Waco, Texas, Chip and Joanna Gaines, then you know how amazing these houses can turn out after renovations are complete. Click here to see some examples of the Gaines’s work.
Doing renovations can allow an owner to customize their home to their wants. Whether renovations include taking out a wall, adding beams on the ceiling, or installing a tub with jets in the master bathroom, there are many ways to make your house a dream home. Often buyers purchase a home for a lower price and use the extra funds they have to renovate it. This can increase home equity by adding value to the house; however, not every renovation is glamorous. Sometimes there is damage to a property that would be very costly to fix, such as roofing, flooring, or infrastructure issues. It is important to do a lot of research when determining if you can take on a house that needs work.
Sometimes the money put into a repair or update does not equal the return you will receive once the house is sold.
Latah Realty Broker, Sean Wilson, notes that “The term ‘fixer’ Is relative to the skills of the person doing the fixing.”
The more information a buyer has, the better! Doing inspections or having an appraisal completed can give you an idea of what repairs need done, and if fixing those repairs would be worth it in the long run. Another factor to think about is that sometimes the cost of customizing a home, especially cosmetically, does not always increase the value of the home as much as a seller thinks it will. For example, a seller might spend anywhere from $800 to $2,000 installing 4 to 6 recessed lights in a room, but this might only increase the value of the home by $500 to $1,000. This is one of the many factors to consider before purchasing a home that needs repairs or updates.
“There is no substitute for a good location. You can change almost everything about a property except for where it is” (Sean Wilson).
This is especially important to think about if you are buying a house in an unfamiliar area or state. It might be worth it to take a trip to the area you are moving to and get a feel for what different neighborhoods are like.
Chip Gaines always says they “find the worst homes in the best neighborhoods” to turn into someone’s dream home. It is certainly possible to accomplish this!
There are many resources you can use when considering all the factors of what makes a neighborhood a good fit for you or for your family. Some things to consider when researching neighborhoods are crime rates, school districts, population density, general aesthetics, and how relative the houses are to each other. Here is one resource that will help you check all the boxes during your search.
“The devil and the angels are always in the details of a fixer. A good advisor can put things in the proper perspective for you” (Sean Wilson).
Working with a real estate agent can make this process less complicated and less stressful. A knowledgeable real estate agent can ask the right questions about repairs, assess the value of a home and potential value of renovations, rely on trusted appraisers and inspectors, and locate the right neighborhood and right home for you!
Call Latah Realty at 208-883-1525 or email [email protected] to work with a REALTOR® today.