Fixer Upper Or Money Pit?

If you're looking to buy a fixer-upper for your next home or as an investment, it pays to take caution. What may look like an easy profit may turn into a giant money pit. 

Here are some considerations when making your home buying decision.

When buying a fixer-upper, experts recommend looking for homes that need cosmetic improvements rather than structural changes or major renovations. Cosmetic improvements can be made with elbow grease and a planned budget. Renovations and structural changes tend to grow much more significant than anyone anticipates. In addition, they cost extra time and money to get the job done. 
Additionally, while structural improvements may be required to make a home liveable, cosmetic changes generally have a better return on investment. 

When you are considering a home purchase, add up the costs to renovate the property based on a thorough assessment of the house's condition. You will likely want to have the assistance of a home inspector and a real estate agent who knows the area. The real estate agent can advise you about what other homes in the neighborhood go for, what the schools and property values are like, and if the area is on an upswing. 

Be very thorough and estimate on the high end. Include labor and materials. 
Knowing the home s estimated market value once the renovations are complete will help you understand your potential profit. 

Experts recommend deducting another 5 to 10 percent for extras and unforeseen problems. They always happen if you don t make room for them.
Once you do the math, you'll be able to determine what a fair offer is. 

Essentially, it'll be the home s estimated future worthless the expenses to fix it up.

Getting experts to help you with your labor, materials, and estimated value after the renovations are complete will help you make an accurate and fair offer on the home. And always have the home inspected thoroughly so you don t end up having to make significant structural improvements that can eat away at any potential wiggle room or profits. 

Buying a fixer-upper is a great way to save money on a home purchase, and the rewards can be significant. Buy wisely, buy cautiously and use the advice of experts to guide you and your decision.