You’ve found a property that looks like it’s a good deal in a tough housing market. It is in need of some repairs, however. You’ve done the math, and it looks like when you tack on the renovation costs, there is still a good margin in your favor. Should you buy it?
If you have never bought a fixer-upper before, you should think carefully before you move forward. Sometimes, it can be the right decision. But it’s easy to underestimate what is involved with making major repairs to a home.
- Budget. You will need thorough inspections before you buy the home so you understand exactly what needs fixing. But you need to be able to cover more than just those costs. Unforeseen issues could arise along the way. These could include problems the inspection did not catch, or complications during the repairs and upgrades you are doing. Budget at least 10% to 20% extra on top of what you think you will need. If you can afford that, you are at least financially ready to pull the trigger.
- Time. Repairing a home extensively doesn’t just take money. It also takes time. You probably have months of repair work ahead of you. Some of that may come before you can move in, and more of it may follow after. In some cases, you might still be working on some things years later. Ask yourself if you are ready for that time commitment before you proceed.
- Work. In addition to taking time and money, repairing a fixer-upper will require some elbow grease. Depending on your skills and budget, you might decide to DIY a hefty chunk of the work. But even if you don’t, you probably are going to end up DIYing at least some of it. Make sure you are physically and mentally up for that work, with the understanding it will probably be more than what you are expecting. Also think about the personal time you will need to invest in that work, and whether it might eat into your budget in indirect ways (by causing you to have to take time off from paid work, for example).
- Chaos. Finally, one last consideration is that when you have partially-completed home renovation and repair jobs sometimes disrupting your space for months, you will be living with some degree of ongoing chaos for a while. Make sure you are ready for that.
We Offer Flexible Rehab and Renovation Loans in California
At Granite West Funding, we can connect you with flexible financing to repair and rehabilitate a home in Oakhurst or anywhere in California. To get started, please give us a call at (559) 540-2275 to schedule your mortgage consultation.
