6 Things to Know Before Buying a Fixer-Upper

photo by zillow.com

We all love to watch those make-over shows on tv that make fixing up a home look fun and adventurous, but, in reality it can be a lot of work and a huge financial risk! This realtor.com article helps to highlight the top six things you should know before buying that fixer-upper.

1. Find the worst house on the best block. You should spend 20-25% less than what a property in good condition would cost in that same area. Make sure you compare square footage and similar bedroom and bathroom configurations.

2. Find a fixer-upper that only needs cosmetic changes. Foundation problems and water problems should be a deal breaker.

3. Ask a contractor to estimate how much it will cost. Always get an estimate on repairs before you make an offer. Be sure to add 5% for unforeseen issues that may arise.

4. Do the math before making an offer. Look at the numbers to determine that you can sell for more or break even on the amount of money you are putting into the property.

5. Stick to your budget. Do not overspend or choose items that you cannot afford.

6. Investigate home improvement loans. There are ways to renovate with borrowed money.