Five Important Things To Consider When Buying A Fixer-Upper
About twenty years ago, we purchased our first fixer-upper, and it turned out to be one of the worst houses we've ever seen. It was covered in mold and the basement had around four feet of standing water, yet we went ahead with the purchase. We were young and eager, and though the experience eventually paid off, looking back, we wish we had had more knowledge and tools before diving in.
That being said, we can attest that buying a fixer-upper is an exciting and rewarding endeavor. Whether you’re a veteran renovator or a first-time home buyer looking to add value to a property, taking on a fixer-upper project is a great opportunity to create the home of your dreams. While the idea of rolling up your sleeves and transforming an old home is thrilling, it’s crucial to carefully evaluate certain factors before taking the plunge.
Key Factors to Assess When Buying A Fixer-Upper
1. Location, Location, Location!
There are many things you can change about a house, but its location isn’t one of them. That’s why the location of the property is one of the most important things to consider when determining if it’s worth the investment. A fixer-upper on a desirable street or a highly sought-after neighborhood can increase in value as you make improvements.
While you’re scoping out the property, assess the neighborhood’s potential. Are other homes in the area being renovated? Is the neighborhood gentrifying? An up-and-coming neighborhood could give your home a greater return on investment.
Proximity to schools, public transportation and stores can also make a significant difference, however, it’s wise to avoid homes on busy roads or near loud freeways. Gutting and updating a home in a suboptimal location can hinder your resale value, so choose wisely!
2. The Big Ticket Items
Substantial repairs, like replacing a roof, updating windows or overhauling mechanical systems (think HVAC, plumbing, electrical), can quickly drain a renovation budget. Nobody wants to buy a home only to realize they need to empty their pockets to fix cracked shingles on their roof or replace poorly insulated windows.
Finding a fixer-upper where these pricey components are already in solid condition means more of your money can be allocated to exciting, visible updates - like new floors, kitchen upgrades and fresh paint. Pro tip: Always be sure to get a thorough inspection to assess these major items before moving toward a purchase.
3. Cosmetic Improvements Are Your Best Friend
Not all fixer-uppers are created equal, and if you’re lucky, you can find one that doesn’t require a complete gut renovation. The most worthwhile deals often involve homes that need only cosmetic improvements - think fresh paint, modern lighting, refinished floors or a kitchen refresh. These kinds of projects are more considerate of your budget and typically deliver the biggest visual impact. A home with “good bones” but outdated finishes is our perfect candidate when searching for a fixer-upper.
A great example of this is this kitchen remodel. While the home was in decent condition overall, it looked its age aesthetically. Since the more expensive elements were still in exceptional shape, we were able to allocate most of the budget toward enhancing the functionality and visual appeal of the space.
4. Renovation and Expansion Potential
It’s always wise to consider the long-term potential of a property. Does the lot have the space for future additions or expansions if that’s part of your plan? If you’re thinking about increasing square footage, adding a second story or creating an open-concept layout later on, it’s smart to ensure the home’s structure and local zoning laws will support your vision. Every city has a limit on the percentage of a lot that can be developed. A home with strong expansion potential can help it appreciate in value, making it an even better investment.
5. Anticipate and Budget for the Unexpected
Fixer-uppers are like life in that no matter how meticulously you plan, surprises are inevitable. Whether it's hidden water damage, outdated wiring, or other unforeseen issues, it’s smart to set aside an extra 20% of your total budget as a cushion for unexpected costs. Being prepared ensures you can handle any surprises that arise without throwing off your project’s timeline or budget.
6. Bonus Tip: Find The Right Partners
In our opinion, this is the most important tip - without a skilled and resourceful partner, your project may never reach its full potential.
At Fox Realty, our agents are experts at identifying the hidden potential in every home. We also have all of the resources to help bring your vision to life, from collaborating with our design studio, Foxwell, to handling construction through Fox Homes. We've got everything you need to make it happen!
Thinking about a fixer-upper? We’d love to help you find the perfect one! Send us a message, and we’ll set up an introductory call.