Is a Fixer-Upper Right for You?
Thanks in part to HGTV “fix & flip” shows, and the rising price of homes in Grey & Bruce Counties, a growing trend we have noticed among millenials is to buy inexpensive fixer-uppers with the intention of fixing up and living in. Without extensive research and a good budget, some Buyers end up getting in over their heads and worst case scenario, lose the home later.
Is a fixer-upper a good idea for you? There are many costs and time considerations that we think you should look at before you decide to buy a fixer-upper. Here are a few tips to help you decide if a fixer-upper is for you:
Set Your Goals:
Once you have zero’d in to a home you think will work, it’s time to set your goals. Write a list of the goals you want to accomplish with the renovation. Try to get all your ideas down on paper so you can eventually decide what are the “must haves”, “would be nice”, and “Probably not going to happen”.
Be very specific. Do not write “renovate kitchen”. Itemize each element that you would like to change (cabinets, sink, countertop, electrical, plumbing, ductwork, flooring, etc). This will help you determine how extensive and probably, expensive, the renovation will be. Setting your goals and itemizing your specific needs will help you determine a budget.
Create a Renovation Budget:
Once you have created your list of goals, it is time to work on a renovation budget. There are many factors that contribute to costs including permits, square footage, finishes and materials. If you are planning to DIY, begin getting pricing on the materials based on your specific itemized elements from your goal list. If you plan to hire professionals to complete your renovations, this is the time to approach them to help you work out a budget.
A basic kitchen renovation will most likely cost over $20,000 (depending on size/finishes/appliances/etc). A new furnace and ductwork will most likely cost over $10,000. Renovations are much more expensive than most people realize.
Check out Smartsheet.com to get free renovation budget spreadsheets.
Firstly, begin by talking to your local building department about the permits necessary for your renovation and get an estimate on the costs involved.
Not all the work on a renovation project can be completed DIY. Plumbing, Electrical and mechanical work will require professionals. Call three professionals of every type and ask for cost estimates.
Research professionals, ask friends and family for references. Renovations can cost a significant amount of money and you want to make sure you spend it wisely.
Add a 20% contingency to your budget for unexpected extras. Every renovation costs more that you anticipate.
Renovations take way longer than a 30 minute HGTV show would have you believe. Materials need to be ordered and some items may take 6-8 weeks and beyond to arrive. Contractors can help you with your schedule, so you need to factor in your living situation while waiting on renovations. It may not be feasible to live in your home while some renovations are ongoing (no heat, no plumbing etc). Add to your budget a rental during renovations.
A smaller renovation can take well over 3 months to complete. Major renovations could take 6 months. Be prepared!
Is a Fixer-Upper For You?
After completing your budget, talking to professionals and taking time into consideration, is a fixer-upper for you? If you are prepared, have done all your research and are ready to take on the project: Go For It! A home finished to your taste and needs is something you can be proud of for many years to come.
If a fixer-upper is for you, contact your knowledgeable Saugeen Team professionals, Samantha Trumbley, Sales Representative and Scott Saunders, Broker to help you find the right home, budget and tips to maximize the value!
Written by Samantha Trumbley, who previous to becoming a Realtor (r), was a construction Project Manager in commercial/industrial construction for over a decade. My motto is to plan, plan and plan some more!