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Buying a fixer-upper Published February 6, 2010 Many people are intrigued by the idea of buying a rundown home, moving in, fixing it up and reselling for a profit. Fixer-uppers can be a lucrative investment, but they’re not a sure thing. A home that seems like a great bargain now can become a money pit if you don’t do your homework. How do you know if buying a fixer-upper is for you?1. Begin your search by checking out both the Internet (HAR.com) and the real estate section of the Galveston County Daily News. Enlist the services of a Realtor who knows the fixer-upper market in your area. That person will be an ally in your search. Have your Realtor take you inside for a closer look. Many of these fixer-uppers look quaint and immaculate on the outside. The inside, however, is sometimes very different. You’ll soon learn to distinguish between homes that are worth your time to investigate and homes that probably aren’t. 2. Routine remodeling jobs like painting or installing new light fixtures are a far cry from adding a second bathroom, remodeling an outdated kitchen or landscaping the front yard. Tackling these improvements without the necessary experience and expertise can lead to costly mistakes. And if the home really only needs easy, inexpensive or purely cosmetic repairs, your efforts probably won’t add enough value to be profitable anyway. 3. As a general rule of thumb, improvements that are invisible to buyers or merely bring the home in line with expected minimum standards don’t add much resale value. And you don’t want to over-improve the home relative to other homes in the neighborhood. Taking your time and finding a reputable lender, Realtor and home inspector — and maybe even taking a home remodeling course — can help you make the right decision. Also, check with your accountant for the most current IRS rulings and laws governing investment properties, as these change frequently. For more information, please visit TexasRealEstate.com and HAR.com. Nancy Furst, CIPS, TRC, GREEN, GRI, is owner of The Furst Group and serves as southeast district director for the Houston Association of REALTORS® (HAR). She is actively involved in HAR’s governmental affairs efforts and has lived in the southeast district since 1997. Please visit TexasRealEstate.com or HAR.com for more. - Written By Nancy Furst |
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