You’re a handy person. You have watched all the HGTV shows and are ready to dig in and makeover a needy home into your dream.
Perhaps you are thinking about buying a property to fix up and flip. Whatever the purpose of looking for an ugly duckling property, there is a difference between a fixer and a dated home; its’ important to understand the differences so that you make the right purchase for your needs.
A fixer can be a mess. That’s just the honest truth! A fixer home can range from the “handyman’s dream” to one that should be stripped down to the studs.
Typically, a fixer will have deferred maintenance. In order to bring the home back to livable condition, you might be replacing major systems. These could include the furnace/air conditioning, plumbing, roof, electrical. A fixer often has health and safety issues that must be addressed.
A fixer can also difficult to finance if the damage is too severe. Lenders will only lend on properties which can be lived in. An FHA (Federal Housing Administration) home is the most stringent about the condition of the home. Their appraisals include the ability to actually move into the home and inhabit it upon closing. Something as simple as a missing stove can cause the lender to deny the loan.
A dated property by contrast is more of a cosmetic issue. Think of grandma’s pretty floral wallpaper in the master bedroom or vinyl flooring in the kitchen and you’ll have the right idea. Dated properties are typically livable but the style is not current. A dated property might be more fun to fix up. You swoop in and replace the shag carpet, install granite countertops and paint the home with a designer palate. A dated property can make a great primary residence or flip.
As you consider purchasing a needy home, think about your skills and level of commitment. What budget do you have to fix up the home and what is your experience. In each case, a good home inspection can help you learn the extent of any important repairs. Even though you intend to remodel, don’t skip the home inspection or you might use your budget to replace the roof or dig roots out of the plumbing system and have nothing left over for the fun designer touches. Get the facts and then you can grab your tool belt and make the property yours.