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Since we are a DIY site designed to save and make you money I thought this guest post from Brett Engle of DIYguys.net would be cool.
Fixer-Upper Life: 3 Tips For Buying and 3 Tips For Renovating
If you’re in the market for your first house, you should consider a fixer-upper. Fixer-uppers tend to be less expensive, and if you’re a project junkie, you’ll have plenty of opportunities to get your hands dirty. Outlined below are tips for people new to the housing market and how to prepare for make that first real dive. If you’ve already gotten a fixer-upper, the last three steps are just for you.
- Budget beyond the mortgage
Just because you can afford the monthly mortgage payments doesn’t mean you can afford the move. Estimate your home affordability based on your annual income, down payment, monthly spending, loan type, and current average Annual Percentage Rate (APR) for your home loan. An article on Bankrate recommends that home expenses should not exceed 30 percent of your gross monthly income.
Consider using an online calculator to determine how much you can afford to spend toward a down payment based on your annual income.
- Consider your options before committing
Think about what kinds of home projects you’re comfortable with. Some fixer-uppers go beyond ugly shag ‘70s carpet and five extra layers of wallpaper and can have serious structural issues. Look at different options of fixer-uppers and carefully consider your decision. If you decide to take on the challenge of rehabilitating an older home, you’ll need to arm yourself with proper tools such as jigsaws, drills and hammers. The initial price tag may be tempting, but in the long run, it might cost you more.
- Enlist a small army of professionals
If the idea of paperwork makes you sleepy, it might be worth your time investing in a real estate agent. A real estate agent will be able to contact inspectors, know how to negotiate, and maintain positive relationships with the sellers. If you start encountering legal issues (such as evictions and rentals), you might need to hire an attorney.
If you’ve already gotten your fixer-upper and are aching to dive into repairs, here are the first steps you should take into making your house a home.
- Do your research
Look at the projects you plan on doing and research how to fix them. Some projects can be taught through an online video, but other repairs require professionals. You can hire an architect or a contractor, who can help you take care of bigger projects. You can do some projects on your own, but for the big ones, U.S. News recommends letting a contractor or an architect to determine your most immediate needs as well.
- Take care of the most important aspects first
If you’re living in another house while fixing up this one, it’ll be easier to decide on your projects. If you’re living in your fixer-upper, however, you’ll need to prioritize which areas will get the treatment first before moving onto the rest of the house. If there are any kinds of leaks or holes that get in the way of actual living, repair those first.
- Stay or sell
Once you’ve renovated, the question is: Should you stay or should you go now? The Clash references aside, if you’re looking into selling it, make sure you approach it more as a business. Be patient and understand that sometimes you won’t always turn the kind of profit you’re hoping for.
House flipping is a tricky area. It’s still likely that you can lose money on flipping a house. If you’re approaching buying a fixer-upper strictly for getting into the flipping business, make sure you’re smart about it.
However, if you’re looking to make this your permanent home, then what you can do is move in and enjoy the fruits of your labor. It’s your home, and you’ll always feel a little more connected to it after having worked on it. As long as you set a smart budget, stay patient in the buying process and research the market, you can find an excellent property that you can make your own.
Bret Engle | DiyGuys.net