We get so many requests from potential investors looking for a fixer upper, as if it sounds so easy to get your hands on one in the first place. The reality is that in current market conditions your fixer upper is as scarce as chicken teeth and when you do find one there is already at least twenty buyers waiting to get their hands on it.
Herewith a couple of things to consider before putting your money into a project of this nature.
1. Do you have the cash?
Start off by getting at least three quotes from experienced and well known builders and even try and find a building inspector to give you their input as well. It is always a good idea to approach the real estate agent to enquire what is the typical requirements of buyers in the area. Rather spent more time on quotes and what exactly you want to renovate before starting with the actual renovation project. The longer you look at the renovations on paper the better and of course the cheaper. The last thing you want is to make a mistake with for example a wall that must be demolished and only to realise afterwards that it was a mistake. Make sure that you add at least 20% to the quote just to cover for that odd unpleasant surprise. Make your calculations and decide if you have sufficient funds for the project and if not make sure you can qualify for a building loan.
2. Do you have the time to invest in a fixer upper?
To appoint a builder is easy, but unfortunately you have to be available and inspect the work as the project progresses. You will be surprised how much time it may take and if you have a fulltime career rather consider to appoint a project manager. Should you follow that route the cost will increase further.
3. Are you practical?
The cheapest labour is of course your own but do you have the know how? The saving can be significant if you can do a lot of the renovations yourself. Majority of renovating a fixer upper is not that difficult, but you always end up somewhere along the way with specialised equipment that might just get you stuck or even worse in hospital. Rather have an experienced builder at hand.
4. The unpleasantness of living on a construction site?
The best option is to live elsewhere whilst you are busy with your fixer upper. At the best of times it is extremely challenging to stay in an unfinished home with builders knocking every morning on your door, the sound of power tools while you are having your breakfast can become all very irritating.
The best advise before considering the option of purchasing a fixer upper is to rather sit down with your real estate agent who is usually the best informed person to help you identify a fixer upper. Find one here on our website.
Author: Deon de Swardt