This is a collaborative post
There’s no denying the allure of a fixer-upper. Whether it’s a charming Craftsman bungalow or a mid-century ranch, the idea of taking on a renovation project can be irresistible. But if you’re planning on starting or expanding your family, you’ll need to carefully consider if a fixer-upper is the right choice for you.
There are many hidden costs and potential pitfalls associated with buying a fixer-upper, and unless you’re prepared for them, they can quickly turn your dream home into a nightmare. In this article, we’ll discuss what you need to know before buying a fixer-upper to accommodate your growing family.
Here are 13 things to keep in mind if you’re thinking about buying a fixer-upper to accommodate your growing family:
1. Location, location, location
While a fixer-upper may be cheaper than a move-in-ready home, the location is key. If you’re looking in an expensive neighbourhood, the price of the fixer-upper may not save you much money in the long run. Consider the quality of the schools, commute times, and other factors that are important to your family when choosing a location.
The key to finding a great location for your fixer-upper is to balance the cost of the property with the potential for appreciation. Look for areas that are up-and-coming but not yet fully gentrified. This way, you can get a good deal on the property and still reap the benefits of appreciation as the neighbourhood improves.
2. The size of the house
When you have children, you need more space. A fixer-upper may give you the opportunity to add on to the house or finish an unfinished basement, but it’s important to consider if the house will be big enough for your family once the renovations are complete.
To have a realistic idea of the finished product, create a floor plan of the house as it is now and another floor plan of the house as you envision it. This will help you see how much space you really have to work with and if the house will be able to comfortably accommodate your family.
3. The condition of the house
A fixer-upper is going to need some work, but you don’t want to bite off more than you can chew. Be realistic about your own DIY skills and consider hiring a contractor for any major renovations. You’ll also want to get a professional home inspection to assess the condition of the house and identify any potential problems.
A typical inspection will cover the condition of the roof, foundation, plumbing, electrical, and HVAC systems. The inspector will also look for any evidence of water damage, mould, or other environmental hazards. The cost of the inspection is worth it to have peace of mind and avoid any expensive surprises down the road.
4. The cost of the renovations
Before you buy a fixer-upper, you need to have a realistic idea of how much the renovations will cost. In addition to the materials and labour, there may be unexpected costs such as asbestos removal or repairing structural damage. Get estimates from contractors and factor in a contingency fund to cover any unforeseen expenses.
A budget is also important because it will help you prioritise the renovations. You may need to make some tough choices about what gets done now and what can wait until later. But remember, even small cosmetic updates can make a big difference in the overall look and feel of the house.
5. The time it will take to complete the renovations
You may be eager to move into your new home, but don’t underestimate the amount of time it will take to complete the renovations. If you’re planning on doing some of the work yourself, factor in the time it will take to learn new skills and complete the projects.
If you’re hiring contractors, make sure they have a realistic timeline for completing the work. Also, get some references and check out their previous work to make sure they’re up to the task. The last thing you want is to be stuck with a half-finished house and no one to finish the job.
6. The impact on your family
Undertaking a major renovation project can be stressful for your whole family. If you have young children, you may need to make arrangements for childcare or find a temporary place to live while the work is being done. Be prepared for some disruptions to your daily routine and try to minimise the inconvenience for your family as much as possible.
It is an adventure to buy a fixer-upper, but it’s important to do your homework first. By considering the cost, time, and impact on your family, you can make sure you’re prepared for the challenges ahead.
7. The impact on your finances
Renovating a fixer-upper can be expensive, so you’ll need to be mindful of your budget. In addition to the cost of the renovations, you’ll need to factor in the cost of carrying two mortgages if you’re unable to sell your current home right away. You may also need to tap into your savings or consider direct lender loans to finance the project.
At the end of the day, you need to make sure the financial impact of buying a fixer-upper is something you’re comfortable with. If the numbers don’t add up, it’s probably not the right house for you.
8. The value of the finished product
It’s important to remember that not all fixer-uppers will increase in value after the renovations are complete. If you’re planning on selling the house in the future, research comparable homes in the area to get an idea of how much your renovated home might be worth.
The average growth of property value is about 9% per year, so if you’re hoping to make a profit on your investment, you’ll need to consider that when making your offer. In some cases, it may be better to buy a home that’s already been renovated and is move-in ready.
9. The resale value of the neighbourhood
The value of your home is not just determined by the condition of the property but also by the surrounding neighbourhood. If you’re buying a fixer-upper in a neighbourhood that is on the decline, it may be difficult to sell the property in the future, even after completing extensive renovations.
Try to schedule an appointment with your local council to get an idea of any upcoming changes or developments that could impact the value of the neighbourhood. You can also talk to a real estate agent to get their opinion on the resale value of the area.
10. The market conditions
The real estate market is constantly changing, so it’s important to stay up to date on the latest trends. If you’re planning on selling your home in the near future, you’ll need to factor in the current market conditions when pricing your renovated home.
If you are unsure about when the best time to sell might be, talk to a real estate agent or mortgage broker to get their professional opinion. They’ll be able to provide you with the most up-to-date market information and help you make the best decision for your situation.
11. Your long-term goals
Before buying a fixer-upper, take some time to think about your long-term goals. Are you planning on selling the house in a few years, or do you intend to keep it as a rental property? What are your plans for retirement? If you’re not sure what you want to do with the property in the future, it may be best to wait until you have a clearer idea of your goals.
12. The risks involved
There are always risks involved when buying a fixer-upper, so it’s important to weigh the potential rewards against the potential risks. Some of the risks you’ll need to consider include:
- The risk that the house will take longer and cost more to renovate than you originally planned
- The risk that you won’t be able to sell the property for a profit after completing the renovations
- The risk that the market conditions will change and you’ll be stuck with a home that’s worth less than you paid for it
- The risk that you’ll be unable to get financing for the purchase or the renovations.
13. The potential rewards
Despite the risks, there are also potential rewards to buying a fixer-upper. If you’re able to successfully renovate the property, you could end up with a home that’s worth significantly more than you paid for it. You may also be able to find a fixer-upper in a desirable neighbourhood that you otherwise wouldn’t be able to afford.
The bottom line
Whether or not buying a fixer-upper is right for you depends on your individual circumstances. If you’re prepared to take on the challenges of renovating a property, it can be a great way to get the home of your dreams at a price you can afford. However, it’s important to do your homework and be realistic about the costs and risks involved before making any decisions.