Whether you’re a first-time home buyer or if you’re searching for your second or third spot, purchasing a fixer-upper—a house in need of some good TLC—is often a tempting option. After all, they’re often moderately priced and offer so many opportunities for you to customize.
But are they a solid investment? We have a few guidelines for investing your time and money into a fixer-upper as your new home.
Determine the Average Home Value
To determine whether or not a property that interests you is a wise investment will require a lot of work. You will need to figure out what the average home in the area sells for, as well as the cost of the most desirable ones.
Fixer uppers are literally everywhere, even in wealthy enclaves. What sets them apart is price. These homes have a lower market value than other houses in the immediate area because they have either been poorly maintained or, in some cases, abandoned.
If you’re interested in a fixer-upper and want to find out what homes in the neighborhood have sold for in the past year, request a neighborhood sold report. Or, you can find out the true market value of the home by requesting a comparative market analysis.
House-Hunt Strategically
Keep in mind that a home price that looks too good to be true probably is. Find out why before pouring your hard-earned money into it.
When looking for a fixer-upper, follow this basic strategy: Find the least desirable home in the most desirable neighborhood. Then decide if the expense that is needed to repair the property is within your budget.
If you’d like, you can look for homes using our advanced home search tool.
Should You Avoid a Fixer-Upper?
If you’re a newbie homeowner with minimal experience in property value, it may be in your best interest to avoid run-down properties that need extensive work.
Instead, consider starting with a property that only needs minor cosmetic work – one that can be completely refurbished with paint, wallpaper, new floor and window coverings, landscaping, and new appliances.
Need Help Searching for a Home?
As a Member of the Top 5 in Real Estate Network®, I have a wealth of real estate and homeownership information that may be of help to you. Feel free to contact me any time to learn more about buying a home in the Metro DC area, and be sure to forward this article on to any friends or family that may be interested as well.
Until next time,
Melinda
