Buying a house that needs some TLC can be rewarding and daunting.
If you have the ability to buy a house at less than market value and make it your own. Then rehabbing a house can be fun, and it’s something you’ll take pride in for many years.
However, it’s not for everyone. Here are a few basic questions to ask before you buy an older house that needs work.
• Can I see beyond cosmetics? A DIY home might be right for you, if you have a basic understanding of mechanicals (heating, plumbing, electrical systems) and a bit of vision. “For instance, a home might not be selling because it has a cramped galley kitchen. If you can envision what it would look like with a wall knocked out, you might get a great value.”
• Do I get a home inspection? An inspection is a good starting point, but be aware that even the most thorough inspection may not show all problems; issues with the roof, gutters and chimney may develop with time, or it may be too cold to inspect the air conditioning system. Exterior conditions are often overlooked, trees, for instance, can cause mold and clog gutters, adding to basement moisture.
• What will renovations cost? Most mortgages don’t allow for renovation expenses, so a DIY-er needs a certain amount of cash in hand, use a spreadsheet and itemize every item. Before hiring any contractor, always get four or five quotes.
• Do I have the resources to handle unexpected issues? It’s the rare rehab project that comes in under — or even close to — budget. After the demolition and renovations begin, dreams tend to increase, and buyers want bigger, better, and more. Unforeseen problems and delays — the warehouse sent the wrong size windows, for instance — tend to crop up once work is underway. A good rule of thumb? Budget 25 percent more than the quote for each job, and have patience with what can seem like an endless process.
• Do I have enough experience? You need to know what you can handle, and what’s better left to the pros. Buyers often make the mistake of thinking they can complete a DIY project without addressing the underlying problems. Oftentimes, buyers talk about how they’ll knock down a wall to open up a room without considering if the wall is load-bearing. Or, maybe they want to add a master suite on a third floor, with no knowledge of how the plumbing will be run.
• What do similar homes in the area sell for? You want to be able to get your money out of the house, even if you’re not planning to sell right away. People go in and buy a house and throw an exorbitant amount of money at it because their friends tell them it will sell for $500,000, You need to be smart about it and research the area; every dollar you spend over market value, you won’t get back.