Investing in a fixer-upper home is a great way to build equity and save money, but how do you know you're not buying into a money pit?
- With every major renovation, you're going to run into problems. "Previous homeowners may have tried to do work themselves, causing structural issues contractors or home inspectors won't see until they open up the walls,” Jonathan explains.
- “Upgrade things that will impact the energy-efficiency of the home,” says Jonathan. People usually focus on cosmetics, like a nice floor or light fixture. Investing in a new heating system or insulation will pay for itself in the long run.
- Fake it. If you can't afford a custom kitchen, save money by installing pre-fabricated cabinets and make them look custom with proper finishing, undermount lighting and crown molding, says Drew.
- Know when it's not worth the effort. Upon the first home inspection, you should have a good idea, but as Jonathan suggests, you can bring in a contractor as one of your conditions and have them give an estimate for all the work. "It's like having a secondary inspection for free because they're not going to charge you to do an estimate."
- Location, location, location. "If your home is near railroad or power plant, it does deter buyers and takes away from the value of the home," advises Drew.