Is it worth it to buy a fixer upper?

annamariejackson123

I found a house towards the country for $35,000 (we can obviously talk them down). The house has been completely gutted and is totally empty including the carpeting/ flooring. It is a two-story, four bedroom house, with a partial basement and garage located on an acre of land. We're not experienced and this will be our first house, but we do have family members experienced in electrical, plumber, and other useful trades. However, I'm still quite nervous that in the end it would be much more trouble than it is worth. Does anyone have any suggestions or opinions? (Please, not too harsh! Lol.) 

annamariejackson123

Oops, forget to mention, it's a two car garage, two and a half baths, and approximately 2503 sqaure feet.

AprilZ81

Buying a house like that is a great way to get a larger house than you could normally afford, but it is also a way to get in over your head.

Before you put in an offer I would talk to your family members and ask them to give you a quote on how much it would cost you to have things fixed and make sure they are willing to help.  Take those numbers and then add in another 10-15% as a buffer.

For those areas where you don't have family members helping out be sure to get some ideas on cost.

For areas like flooring, kitchens and bathrooms it will be very easy to get really expensive items.  You will need to strike a balance between quality and price or your will spend more than you can afford.

Keep the timeline realistic as well.  We had our kitchen remodeled last fall and it took 8 weeks with a professional doing the work.  Thinks will take longer than you anticipate and be more expensive than you think.  Just be prepared.

JoanE2012

It all depends on your overall budget.  For us, we wanted something that was pretty much move in ready and to our taste and will update more in the coming years.  A fixer upper can definitely be a great move (and 35k sounds like a steal!) if you have it in your budget to fix and you have the time.

NoneForUs

I think it is worth it if you are handy or if you can afford to hire professionals to do all the renovations. 

musictchr25

Take a look at the past decade's worth of tax appraisals on your property, and any past sales and estimated home values in the real estate market. If the highest value of your house and the land that it is on still significantly less than what you would end up spending in total to rehab the property, then I would say that buying this fixer would be worth it. You don't want to over-improve for the area or for the maximum value of your home. While the market is still recovering, and is on an incline, I would hate for you to put too much money into the property and never get it back, even if the market does recover fully. 

MommyLiberty5013

I personally wouldn't be too comfortable hiring family to do my house. Obviously, you may be different on this, but I wouldn't want to have them do it:

1. If they mess up - it could get awkward.

2. Many times money exchanged between family members' hands is dicey.

3. There's a big difference between being a DIY plumber, electrician, and dry waller and an actual professional. I wouldn't want a weekend DIYer to come to my house in their free time to work on my project.

4. Time. Family members will obviously have lives and jobs of their own, which may mean my home would be last on their to-do list.

As for whether or not to do a fixer upper, $35k on a bare bones home on 1 acre still seems cheap, which makes me wonder if it has problems with septic, well, roof, windows, and other mechanicals. In the least if you go this route, you should pay out of pocket to have everything I've mentioned inspected by an independent certified inspector (not your contractor buddy relative guy).

DH and I are in our second home, we've considered moving to a fixer upper in the country also. But, we've already had 2 home owning experiences under our belts. One was one we built new construction and the current one we live in now was built in 1993/4 and we're the second owners. In both cases, home ownership is awesome, but it's a bumpy road too.

OtterJ

You'll need to do a lot of research and make three preliminary tasks lists:
1 - what is absolutely necessary for the house to function (plumbing, electrical, structural issues, etc.)
2 - what you want to make your house comfortable (A/C, fans, vents, extra security, extra built-in storage, cooking/laundry/dish washing appliances, etc.)
3 - what you want in order to make the house your home (minor wall/flooring repairs or upgrades, paint, trim, window treatments, ceiling fans, decorations, etc.)

Make a the three lists with as much detail as possible, and a timeline and budget for each item on each list (research and estimate to the best of your ability, and add extra "oops" room). 

Then think about what your life will be like while you progress through the three lists. 

• Do you have another place to stay while everything on list one is fixed?
• Can you live in the home without things on list two while they get finished?
• Are you okay without unpacking or actually setting up your home until list 1, 2, and part of 3 are finished? 
• Do you both work full time, or will you be able to devote more than just a few nights and weekends?
• If you do work full time - when you hire professionals or ask for family help, do you feel comfortable having people work on things in your home without you there to supervise?
• Do you have enough cash on hand to cover the cost of the house, insurance, taxes, utilities, and all of the materials, supplies, and professional help that you'll need to fix it up?

For the most part, there aren't right/wrong answers to the above questions (except the one about having the cash readily available for repairs - you'll need money, obviously!).  Some people would have no problem living in a construction zone for months (or years) on end, while other people would object to having to so much as paint.  It just depends on your own tolerance and preferences. 

Full disclosure:  We bought a house that had a lot of things needed for lists #2 and 3.  We both work full time, and progress has been extremely slow.  Living in an unpainted, undecorated house (because there are things of more importance on our to-do lists still) is driving me a little batty.  If I could go back, I would rather have spent another $20,000 on a house with a smaller to do list.  

The house that you're considering sounds really great....but it also sounds like a massive amount of work.  Even if financially, you come out on top, you have to decide for yourself if you're okay with accepting the opportunity cost (the time/effort spent remodeling your home).