If you’re keen to invest in bricks and mortar, you may be considering which type of property to buy. Do you stick with a safe bet and go for a new home in good condition in a desirable location or do you take a risk on something a little more adventurous? If you’re toying with the idea of purchasing a fixer-upper, here are some tips to help you tell the difference between a money pit and a diamond in the rough.
Working to a budget and predicting renovation costs
Your budget should always be the primary concern when you’re looking for potential properties in which to invest. You could buy the most incredible house you’ve ever seen, but if it doesn’t sell for what you anticipate, the quirky interiors, stunning views, and polished finish won’t count for anything. Make sure you have a realistic budget in mind and also that you understand the market. There’s no point in spending a huge amount of money renovating a house, which will end up being unaffordable for the type of buyer you wanted to target. You need to find a balance that enables you to do a good job, but also make as much profit as possible.
Getting to grips with the project
They say you should never judge a book by its cover and this is certainly true when it comes to investment properties. When you’re looking at a doer-upper, don’t just focus on what you can see straight away. Delve deeper and get to grips with what’s involved and what kind of potential the property offers. A cosmetic project is a very different proposition to a building that has shaky foundations and tiles slipping off the roof, so get in touch with firms like https://www.dallasfoundationpros.org/, get some quotes, and work out how much work is involved, how much you need to spend and how this compares to the projected market value. In some cases, it may be worth your while taking on a lot of work, but often, more straightforward options are more appealing to investors.
If you’re buying a fixer-upper, it’s always a good idea to think about how you could add value before you draw up final plans or submit an offer. Take a look at other properties in the area, learn more about what buyers want and what they’re willing to pay extra for, and get in-depth information about property prices in the neighborhood. If you’re considering your options, you may find this article interesting http://www.idealhome.co.uk/project-advice/project-planning/how-to-add-value-to-your-home-property-advice-73696. If you’re targeting a family market, for example, you may find that knocking down walls and creating open spaces, converting lofts or basements or adding a single-storey extension could increase the sale price significantly.
Buying a house that isn’t in pristine condition or a property that needs some TLC may be a gamble, but sometimes, taking risks pays off. If you’re thinking about adding a fixer-upper to your portfolio, plan meticulously, make sure you know everything there is to know about the property, the target buyer, and the local market, and keep a close on your finances.