What to Look for in Fixer Upper Properties for Sale
What Is a Fixer-Upper? Low Price, Reasonable Property Taxes, Customization, and Start Small are the benefits of Fixer Upper Properties for Sale.
Are you looking for a way to make a little extra money? You could pad your pockets by taking on a side job, or you could do a little real estate investing.
Buying properties can be expensive. You won’t get out of it without taking out a large loan. That’s why many people start out by looking for fixer upper properties for sale.
They’re not as expensive to invest in, so you’ll make your money back and then some. Are you ready to get started on your project? Check out this guide to learn what to look for in a fixer upper property.
What Is a Fixer Upper?
So, first thing’s first. What is a fixer upper rental property? It’s a home that you can invest in for a discount.
The stipulation is that it’s going to need a little work done before you can do anything with it. Many investors put their own blood sweat and tears into the repairs, but you can also hire contractors. If you don’t have any DIY skills, we would obviously recommend the latter.
Benefits of a Fixer Upper
There are many benefits of going this route instead of buying a house and renting it out. The main one is money. You’ll have to put a lot of work into it, but it’s a small price to pay for the discount you’ll get.
It’s also easier to customize a fixer upper, and the property taxes won’t hurt your wallet as much as they would if you bought a house with a loan.
Low Price
Investing in a fixer upper will hurt your wallet a lot less than buying a move-in-ready home. Sellers shave a lot of money off the total price to account for the work that needs doing.
If you can DIY some of the construction instead of hiring a contractor, even better. That’s more money in your pocket that you can use for making the property better.
Reasonable Property Taxes
Your county will charge you property taxes on your house. This is something that you can’t get away from. You can lower the hit to your bank account by looking for fixer upper houses for sale.
You see, you’ll be charged based on the overall value of the property. Since the value of fixer uppers is a lot lower, you won’t have to pay as much.
Customization
If you buy a house that’s move-in ready, you don’t get to call the shots as much. The seller has already picked out all the colors and finishings.
You can go over it with some of your own special touches, but that’s going to cost more money on top of the cash that you’ve already spent for the home.
Tips for Investing
Now that you know why you should invest, let’s talk about how to go about it. There’s a lot to consider in terms of cost and work before you fork over money for a fixer upper.
Think About the Cost
Buying a fixer upper can be about as tricky as investing in any other home. You’ve got to think about how much the property costs in correlation to the price of the repairs.
When you’re doing your cost analysis, make sure that you account for all materials and labor. Once you have these numbers, subtract them from the estimated market value of the home.
Remember that if you’re handy, you might be able to shave some of the costs, off. Do as much DIY work on the place as you can before you call in a contractor.
Start Small
If this is your first time at the rodeo, you don’t want to bite off more than you can chew. Start small by investing in a property that needs simple cosmetic repairs. Think easy stuff like a new coat of paint.
Avoid homes with a heavy amount of structural and foundation issues. The reason for this is that these repairs are expensive. You’re not going to have a lot of money to throw around on your first property.
Hiring contractors for small repairs will also help you find reliable companies that you can work with when you do decide to dip your toes into the more complicated projects.
Come Up With a Profit-Making Strategy
As you’ve probably gathered, when it comes to real estate marketing, you’ve got to spend money to make money. You’ll never do that second thing if you don’t have a proper strategy.
This means deciding what you want to do with the home. You can fix it up and sell it to another person for an instant profit. If you want a steady trickle of income, you can rent it out instead.
Another strategy that many people go with is to live in the house themselves for a few years. That will allow you to avoid a capital gains tax when you sell later.
Get an Inspection Done
You’ve found a house that looked great during the walkthrough. It needs a little work done, but it’s not that damaging. At least, that’s what you thought. Come to find out, it was hiding a ton of wiring and structural issues that are going to cost you a fortune to fix.
This is why you always get an inspection done. A professional can spot potential issues that will go over the average person’s head.
Start Looking for Fixer Upper Properties for Sale
Investing in real estate is a great way to make a little extra money. For many starting out, the financial burden of taking out a loan for a house can be a bit much, though.
If you’re one of these people, finding fixer upper properties for sale might be a little easier for you. They need a lot of work, but if you’re willing to put some love into them, you’ll profit. If you’re looking for more tips for real estate success, visit the Business section of our blog.
