Buying A Fixer-Upper Home: The Buyer’s Guide
Looking to buy a home to fix up and sell for a profit?
Looking to buy a home to fix up and sell for a profit? Here are some important things to keep in mind to ensure you get a good deal and know what you are in for.
A fixer-upper is a property that is in need of maintenance and repairs, but if you find the right one, you could make a great profit. Which is why a number of buyers tend to prefer buying property in need of some TLC. But there are certain tricks involved in finding the right property.
Finding the right fixer-upper
The ideal fixer-upper is a home that everybody will want to buy once it is fixed, but nobody wants to buy right now. The majority of first-time homebuyers will want a home in great condition. A property that doesn’t require any hard work and effort and is ready for immediate occupancy.
The irony of it all is that a number of imperfections such as worn carpets, peeling paint our outdated fixtures that turn buyers off, can easily be replaced and fixed. However, because a number of buyers finding these issues difficult to see past, the home might struggle to sell.
Keep in mind that if you make a purchase offer for a fixer-upper at a fair market price, you will start making money from the moment the hammer falls at auction.
Auctions are a great way to find properties and homes that are a renovators dream come true. The best part about this real estate method is that the entire process is simple, transparent and more importantly quick. Check out the benefits of an auction here.
Things to keep in mind when buying a fixer-upper
Remember, not all fixer-uppers have the potential for profit. Whether the ugly ducking is able to turn into a renovated swan, will depend on a number of factors.
The first of these is the location. In fact, location is probably the most important factor you need to take into consideration. If you are looking at buying a home or a commercial property, where the building is based is of the utmost importance.
Homes need to be based near schools, in safe neighbourhoods and close to malls and parks.
Commercial properties can be closer to highways and thriving business areas.
The trick is to find fixer-uppers that are in good neighbourhoods or even up and coming areas.
You can find more information on the tips and tricks to making a profit on real estate in our blog.
Next, you need to examine the layout of the place. Pay close attention to the configuration of the home. An ideal sized home is one with 3 bedrooms, 2 bathrooms and a decently sized kitchen and lounge area. The layout of the home should flow - get a contractor in to help you assess what walls cannot be moved and what walls can be knocked down.
Does the home have the potential to be fixed up and turned into the swan you imagine it to be?
Keep in mind that the ideal fixer-upper is a home that needs a little TLC as opposed to a complete rebuild which will take a lot more of your time and money.
Every fixer-upper comes with its own list of things that need fixing and renovating. But obviously, some of these issues are worse than others. You need to make a list that separates the cosmetic (easy to fix) issues from the fundamental ones (big fixes).
Cosmetic fixes include:
- Stripping wallpaper, painting, patching up walls
- Installing new light fixtures and ceiling fans
- Replacing old doors
- Replacing or fixing up kitchen cabinets
- Replacing broken windows and glass
- Sanding floors or removing and replacing carpets
More expensive fixes include:
- Replacing air conditioning or HVAC systems
- Shoring up the foundations
- Fixing or replacing the roof
- Replacing all of the windows throughout the home
- Rewiring the home
- Adding on new additions such as a garage or bedrooms
- Remodelling the bathrooms or kitchen
Whilst a fixer-upper home has the potential to make a profit, you need to keep in mind that in order to make the fixes, you will need a fair bit of cash. In some cases, buyers will register a bigger bond to allow them to access additional capital to pay for the renovations.
It’s a good idea to properly evaluate the property first and then draw up a list of expenses including your budget of how much you want to spend on the home. It’s helpful to discuss these plans with an expert property advisor to ensure you do not overcapitalise on the home and can fetch a good price when selling it at a later stage.
If you want any advice or guidance on buying and selling property, chat with one of our brokers and we will happily walk you through the process.
Where to find diverse investment opportunities
If you are looking for an opportunity to find an array of incredible investment opportunities, then have a look at our next Multi-Property auction.
Date: Tuesday the 19th of November at 12 pm.
Location: Masingita House, 41, West Street, Houghton, Johannesburg, Gauteng
What does it include?
Our multi-property auction includes 14 commercial properties for auction. Each property is unique and offers a profitable outcome for buyers.
Have a look at the diverse range of properties here.
Some properties we think you may be particularly interested in include:
- Block of flats in Pretoria West - Well-positioned block of flats containing 36 apartments and 2 retail shop fronts.
- Halfway House - Large Corporate Industrial Property: Great location, large paved yard with storage and easy access to new N1 Allandale Offramp.
Our multi-property auction is not to be missed as buyers are given a real estate opportunity unlike any other.
Until next time,
The Auction Inc Team