Are you looking for a way to put your money to work and your skills to use? If so, renovating old homes is a great way to do this.
Fixer-upper homes are also a great way to make a profit quickly. Reports show that fixer-uppers sell for 15% more on average than turnkey homes.
Of course, you’ll need to learn how to find the right properties if you want to flip a fixer-upper. Read the four factors below to help you make your decision when buying a house.
Table of Contents
1. Know Your Budget
You’re going to have many expenses after you buy a fixer-upper. It probably won’t be a small issue here and there. You may need to make serious renovations before you get it ready for the new buyer.
You need to gain an understanding of what these types of renovations cost. They can add significant costs to your flipping budget, so figure out how much cash you have available to handle these tasks. From there, you can calculate the profit you expect after selling the home to a new buyer.
2. Understand the Location
Location plays just as much a role in a fixer-upper as it does in a normal real estate purchase. Even if you can make a ton of improvements to a home in a bad area, that doesn’t mean there are many buyers willing to make an offer. You may sit on your fixer-upper for too long and tie up your money.
You need to buy in a location where you can expect a quick sale. Research up-and-coming markets to see which regions are in-demand. These are the places you want to focus your search for fixer upper homes for sale.
3. Look at the Foundations
You may have the budget to handle minor repairs. However, things get much more expensive when the bones of a house aren’t good. In many cases, you can spend your renovation budget focusing on things that won’t make a profit.
Ensure you have an inspector who can look for foundational problems with a home. A few foundation issues here and there may not break the bank, but several major problems may not be worth fixing.
4. Look for Easy Wins
One great way to find a profitable fixer-upper is to find a home with many easy wins. These are things like easy room renovations, fixture replacements, hardwood, and much more. Those fixes won’t cost much more and can increase the home’s value more than you pay for renovation costs.
Learn what the common things people look for are and find homes that don’t have those things. If you find a home with these wins and no major problems, you can quickly get renovations complete and sell your home for a profit more easily.
Do Your Due Diligence When Buying a Fixer-Upper
You’re putting a lot of money on the line when you purchase a fixer-upper. You have to trust that you did your due diligence to figure out how much repairs will cost and you’ll be able to make a profit.
That means you can’t afford to make mistakes during a renovation. Remember the factors above when buying a home to ensure you find a property worth fixing.
Check out the blog to find more tips that will help you buy a new home with success.