If you’re living in the UK, it may seem like all of your friends and family have moved house recently or are thinking about it. Lockdowns and government schemes have caused a small boom in demand for housing all over the country.
Unfortunately, this is paired with a rise in national house prices. This trend is looking to continue, so houses are probably going to get even more expensive! Most people wouldn’t like the idea of renting forever, so you need to find a solution.
This means you’ll have to look for more cost-effective ways to purchase your house. Whether you’re an experienced property investor or trying to get on the property ladder, there are some tips and tricks you can use to buy your perfect home for a fraction of the price.
One of these methods we can introduce is buying houses that need renovation or ‘fixer-upper homes’.
Before you start searching for your next property, it would be helpful to know what fixer upper homes are and any potential benefits or dangers. Luckily for you, we’re here to help. Read on to find a quick rundown of fixer-upper homes and whether they could work for you.
A fixer-upper home is a house that needs some serious renovation work. These houses have usually been neglected for a few years, so they have experienced a lot of cosmetic and structural damage.
At first glance, this may sound like a nightmare of a house! So how can they benefit you?
You can find fixer-upper homes for a fraction of the price of traditional houses in the same area, and this means you can save thousands of pounds on the purchase of the house. But buying a house that you can’t live in doesn’t make a lot of sense.
When you buy a fixer-upper home, you’re embarking on a long development project. Unlike buying a typical house, you can’t move into a fixer-upper home straight away.
Lots of construction work will need to be performed on the home to ensure it’s safe and pleasant to live in. This process can be pretty long, so it may not be possible to move into your house for a few months or even years, depending on the size of the project.
This is probably one of the most significant benefits of a fixer-upper.
You can get massive bargains on these homes if you look hard enough. They’re also a lot easier to negotiate with. Most of the time, the owner will want to get rid of these homes as soon as possible as they have no use for them.
With fixer-upper homes, you get a blank canvas. Instead of settling for the design features of a traditional home, you get to choose them all yourself.
Therefore, you can cater the house to all your needs. You can build your perfect home for a much smaller price tag. You can even remodel the whole house and change the location of the rooms.
You have complete freedom over the house, so you can add them to your house as long as your preferences are physically possible.
Generally, when most people search for houses, they’ll be looking for houses that are ready to move into. Therefore, the competition for fixer-uppers will be pretty low.
You’ll find it a lot easier to place a bid on a house that you’ll love. It’s unlikely that you’ll get into those dreaded bidding wars!
The lower competition will mean you and the seller can agree on a lower sale price for the house.
The process of buying and moving into a fixer-upper is not foolproof. Before you jump into a new project, you’ll need to know the possible risks you’re exposing yourself to.
When buying the property from the owner, you’ll be able to get it for a low price. But with a fixer-upper home, that’s only one half of the move completed.
Some renovations can be costly, especially if you’re ambitious and want a lot from your home. Little things like doors and cupboards can rack up and prove to be very expensive. Furthermore, these are only cosmetic costs- structural costs can be very costly indeed.
You don’t want to be in a position where you’re burning through cash, and you don’t have the funds to complete your house. You can even end up spending more on your fixer-upper than you would on an ordinary house.
These can be some of the worst issues to encounter while renovating. When you go to view the house, it may seem like a manageable project. However, when it gets to actual renovation, you’re likely to encounter some underlying issues that you couldn’t see before.
Fixing these issues can be very difficult and also expensive. Solving an unforeseen structural issue is likely to put a massive dent in your budget.
If you’re renovating an older house, then you should expect more of these issues.
Construction projects can last for a pretty long time. If you’re conducting a pretty large project where many changes need to be done, you can expect to be waiting for your house for at least an extra year.
After you complete the sale of your fixer-upper, you have two options: live on a construction site for the next few months, or find an alternative place to stay, e.g. a hotel or rented accommodation.
You can work out the pros and cons of each of these options. Living in rented accommodation or a hotel for a few months can get very expensive, and the price of renovation will be costly, so you’ll need as much money to go to that as possible.
Living on the construction site would save you money, but it definitely wouldn’t be comfortable!
Before starting the project, you need to weigh up both options and decide which one works for you best.
Avoid the dangers and reap the benefits – have Pearl Lemon Properties help you buy a fixer-upper!
To find a fixer-upper home for sale, you can use the most popular property portals like Rightmove and Zoopla. They may be a bit more under the radar, so you’ll have to look a bit harder.
Another tool you can use is auction houses. Auctions will usually list a few fixer upper homes for sale in their lots.
If you have the patience, you could even try the ‘drive around and look’ technique! If you’re lucky enough, you could spot a few homes on your journey that might work for you.
In your project, your budget can either be your best friend or your worst enemy! Save up an excellent budget for the renovation as well as the actual deposit on the house.
Make sure to leave yourself a little space in case you encounter some unforeseen circumstances. Try and stick as close to your budget as possible. It’s not a budget if you go over it by £20,000!
Try and make the most of your viewings of the home. The viewings will tell you if you can actually manage the project or not- never go in blind! Try and get an inspection of the house done. Although it won’t uncover most issues, this will usually tell you any of the most considerable hidden problems with the house. You can then budget accordingly.
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You can look up comparable homes in the neighbourhood, calculate the estimated expenses of repairs and improvements, and estimate the future resale value or rental income once the work is finished to establish the potential profit from purchasing a fixer-upper home.
It’s critical to conduct extensive research on the property and the neighbourhood real estate market before purchasing a home that needs work. You should also engage a skilled home inspector and obtain comprehensive quotations from contractors for necessary repairs or upgrades. A reasonable spending plan and schedule for the required work should also be in place.
Keep an eye on the market and be informed of the current prices for comparable properties in the region to get the greatest discounts on fixer-upper homes for sale. Another option you should consider is working with a local real estate agent who is familiar with the market and can assist you in finding properties that meet your requirements.