Purchasing a fixer-upper with the intention of selling it again is an endeavor that takes a certain amount of personal resources, a lot of entrepreneurial spirit, and not a little bravery. The process can be fraught with perils, but if you pull it off then it can also be a profitable venture. There is also plenty of room for creativity and many personal touches you can add to the property. Whoever ends up owning it, there’s no reason why the property cannot bear the stamp of the person who fixed it up in the first place.
CityHome Collective, a real estate brokerage specializing in modern, luxury homes and condos, boast an intimate knowledge of just what makes a home sell on the modern market. Their experts recommend that, before embarking on the process, you construct a general checklist of things to account for before you purchase and renovate the property. These are the things that apply in every case and which we will sketch out here. Of course, you should not forget that there will be other things – specific to the individual property you are fixing up – that you should account for too.
Things to Consider When Buying a Fixer-Upper
So, what are the general points to remember when buying a fixer-upper? Here follows a body of general advice that you should consult before embarking on the venture:
Conduct a Detailed Cost Analysis
We mentioned above that buying a fixer-upper with the intention of selling it on is something that requires some initial resources and capital. Naturally, you have to buy the property, but you also have to work out how much you will spend fixing it up and, of course, how much you can expect to make once you put it on the market.
Factoring in the cost of the property is the easy part. But after that has been done, it is time to undertake a thorough assessment of the condition of the house in order to determine the cost of materials and labor (yours and other people’s). After that has been done, you need to somehow estimate how much value your proposed work will add to the property. And for this, you need to also consider the condition of the market in which you will sell it.
Pick the Right Property
When picking a property to renovate, you should pick one that is going to pay. As a good rule of thumb (although there can be exceptions here), avoid properties that require major structural repairs and go with those that require cosmetic changes only. It is amazing what value you can add with cosmetic changes, and they will never be as expensive as, say, installing a new staircase or having all the pipes refitted.
DIY Wherever You Can
One of the most obvious and best ways to save money is, quite simply, to do the job yourself. Your own labor will cost you your time but, naturally, not your money. And there is so much that can be done personally such as the replacing screws, painting walls, removing old furniture, or ripping out old carpets. The more work you do, the less you will pay and bigger will be your profit margin when it comes time to sell on the property.
With a little forethought and some circumspection when it comes to selecting the right property, all that remains between you and a handsome profit is your own hard work. Make that work a labor of love, and there is no reason why buying a fixer-upper should not be one of the best decisions you have ever made.
