Sound Real Estate Management tips by S & R Properties
The concept of buying a house that needs work below market value and fixing it up is nothing new. Whether it’s done to re-sell the property or gain immediate equity in real estate you will keep, buying a fixer-upper can represent significant value for a home buyer. And folks have been doing it for a long time. Worcester and its surrounding communities have always presented great opportunities to investors and families looking to settle here.
Of course, reality TV has helped forge opinions of fixer-uppers. You can watch cable TV networks and see dozens of examples of house flips, nightmare rehabs, and beat-up houses becoming dream homes. There’s enough of this stuff on television, in fact, to make potential home buyers confused over whether a fixer-upper is a good idea.
But whether it’s a good idea perhaps isn’t exactly the right question. That question is more like “Is it a good idea for me?” A good idea for one person isn’t necessarily a good idea for the next person. That’s the case in many areas of real estate.
The good news is that you can pretty much get to the answer of whether it’s a good idea for you by instead asking two other simple questions:
- How much work am I capable of doing myself?
- How willing am I to do this work myself?
These are two areas that are frequent stumbling blocks for buyers of fixer-uppers. They see a home in need of repair and realize that if it’s fixed up, it could be worth a whole lot more. The dollar signs flash in front of their eyes, which can blind them to a major reality: The real value lies in how much money you can save by doing the work yourself. And (see the two questions above) they either can’t or won’t do what’s necessary.
Are you willing or able to paint an entire house yourself? If you’re going to pay painters a thousand dollars or more to move a roller across a wall, you’re not getting maximum value on your fixer-upper. Can you change out a defective light fixture or switch? Electricians charge upwards of $50 an hour. So do plumbers. So can you fix a running toilet?
Are you willing to tackle time-consuming, sometimes nasty chores? Tearing down wallpaper is no fun. Renting a drain snake and clearing clogged pipes isn’t, either. And usually, the less savory the job is, the more expensive it costs for someone else to do it. And every dollar you pay a professional to do a job you can do yourself is one less dollar in equity you have in your new house.
A fixer-upper can often represent a great deal. It can make an otherwise unattainable house more affordable. It can be the means to profit on a resale. It can mean immediate equity for a homeowner who wants to live in a rejuvenated house.
But how great a deal depends in large part on the buyer. If you pay others to do all the work required, it might not be that great a deal after all. That’s why it’s vital to ask these two simple questions and answer them honestly.