You’ve fallen in love with that house that is bursting with charm but just needs a little work. With the right plan, you could double your investment and have a beautifully renovated home at half the market price. We’ve asked Realtors Kristen McFeely and Jeanne Whipple from Coldwell Banker Preferred in Philadelphia to share their tips on how to make the most of a fixer-upper.
Focus on the neighborhood
You can always change the house, but you can’t change the neighborhood, says McFeely. Remember, if you’re looking at a long-term investment, the neighborhood dynamic can change over time; even if slowly. If you’re planning on renting the property ask yourself – is it in an area where you can quickly and easily find stable tenants? For example, a property located near one of the universities here will provide a steady stream of student-tenants.
Pick a house with good “bones”
Getting a full home inspection is one of the best things you can do, says McFeely. This will confirm right away whether your home has good bones and will uncover anything that could put a dent in your renovation budget. And – don’t forget to ask about house warranties to protect your investment.
Assume major components will run $3,000, each
Whipple offers this great tip when estimating the cost of renovations. Go through the house and assess all the major components, the HVAC system, bathrooms, etc. and estimate each of those will cost $3,000 to renovate. It’s a good way to quickly estimate the cost of each component of your renovation plan.
Don’t be afraid
If you’re prepared to dive in with a plan with a clear goal, you can control your outcome instead of worrying about your investment. Unless you’re going to do the work yourself, have your team of contractors ready so you aren’t holding onto to an unoccupied building for months. Get ready to jump on it as soon as you own it, Whipple says, and be prepared with all the permits and professionals you need for your plan.