Choosing A Fixer Upper
Friday, November 17th, 2006
The most important word in property investing is Location - and it’s even more important when you’re considering a fixer upper. Don’t look at buying something just because it’s cheap; poor location could cost you heavily in the long run. Make sure that the property is in a generally desirable location, with potential to appreciate.
The next element to consider is the extent of renovation required. Paint and wallpaper, gardens and the like are cosmetic - they don’t cost too much to set right. Remodeling may be a lot more expensive, depending on the extent of changes required. Structural changes like foundations can cost you a pretty penny.
Always get a professional inspection done once you find something suitable; the cost you pay for the inspection is worth much more in losses prevented.
Next, do your homework in terms of how much you’ll pay, how much the renovation will cost, and what you expect to get when you sell it. If you’re planning to live in it, use the numbers to estimate your total home cost - and compare it with the alternatives you have.
You also need to confirm that you CAN get a mortgage / renovation loan adequate to meet the requirements; the worst situation to be in is when you have bought the property but can’t get a renovation loan to do it up.
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