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Fixer-Upper Investment: Fix or Dump
"Location, location, location"
It doesn't matter if you're investing in an apartment, a condominium unit or in this case, a fixer-upper home. When it comes to real estate property, the mantra you still have to recite to yourself is "location, location, location". Continue to base your decision on location factors: Is it a corner lot? Is it near important establishments? Is it in a well-ordered or peaceful neighborhood?
Make a Thorough Search
Not all fixer-uppers are advertised as such. It's important for you to make the most extensive search possible. Besides looking at properties listed in the classifieds that fit your budget, drive around the city as well and be alert for "For Sale" signs stuck on posts. Let your friends and acquaintances know about your interest in buying a house as they may be able to point you in the right direction. Be sure to consider foreclosed properties as well.
Hire an Inspector for a Day
If you've found a fixer-upper that makes your wallet feel it has found its soul mate, hire an inspector to accompany you for a tour of the house. Make sure that you give him sufficient time to explore every inch of the house; this will enable him to give you a full evaluation and a thorough appraisal of the property later on.
How Much Do You Plan on Buying It For?
The great thing about fixer-uppers is that their presently distressed conditions enable investors to buy them for a low price. Experts advise investors however to purchase fixer-uppers only up to 20% below its future market value (once everything has been renovated).
How Much Do You Plan on Spending?
Now that you've bought your dream investment, you can start making changes around the house. But first, plan each change thoroughly. Browse online for contractor listings and have several contractors provide you with their estimates on the house. Check with the appropriate agencies about zoning requirements and other laws that may affect your plans for the house.
How Much Do You Plan Selling It For?
Now that all repairs and remodeling have been completed, you can finally compute the probable selling price of the fixer-upper. Lastly, be ready to negotiate. Not even billionaires accept the initial price of a house.
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Repair Requirements
Reasonable repairs pertain to those minor fixes and refurbishings that will be implemented to make the house a decent place to live again. It shouldn't make the new owner rebuild the whole structure again, or else, buying the fixer-upper house may not be different from getting a brand new one.Here are some guidelines on how to get houses that have reasonable repair requirements:1. Still Strong . . .