With inventories so tight, some home buyers are giving fixer-upper homes a second look. The price point and location may attract more buyers to bite, even if the home needs some repairs.
But how do you tell a hidden gem from a hidden mess when shopping for a fixer-upper?
As a Real Estate Broker and constant real monopoly player [Real Estate Investor] here are a few things to consider when shopping or looking at a fixer-upper. Here are a few tips to consider:
Determine the scope of the project
Are the renovations mostly cosmetic or structural? Before you even look for an apartment or home, you want to understand what type of project you’re comfortable with. Not all projects are the same, and some may need more permits than others. Projects where owners start making additions or knocking down walls can add a lot of money, time and risk. One small bathroom renovation can take weeks, months if not done properly. You have to understand your rights as an owner, the method you hold ownership of the property [a person or corp] and how your city ordinance work and the repairs you can do without permits.
Set a budget
After the purchase cost, how much money will you set aside for the rehab/remodeling? Factor in unexpected costs, such as repairs not seen on the original inspection. Higher permits fees and requirement from your local Building Dept. Contractor increased fees and many other situations that might arise during the rehab/remodeling process.
Establish a team
Larger projects require an architect, who will then hire a general contractor and then subcontractors. You will need to establish a communication path to prevent delays or budget pitfalls. And don’t just hire anyone. Make sure the contractor you are hiring is licensed in his trade or what you are hiring him for, since licensed contractors, will limit the risk of the project. In some instances cheaper contractors, many with less knowledge and less experience, will require more involvement from you and ultimately bring more risk and cost. Select a team with the right experience, solid references and licensed.
Meet your Building Dept and Homeowners Association
Significant renovations may require approval from the Homeowner Association [HOA]. Learn about the permit process through your city’s building department, as well as your HOA ahead of time. Upgrading plumbing and electrical systems, moving walls or changing structural elements will probably require a permit or permission from your HOA. Ensure that your check guidelines, requirements or limitations of work on your HOA rules. A simple job as exterior paint can cause huge headaches, if you do not meet those requirements. Make sure to check and understand your HOA rules as well as your contractor’s contract, making sure you understand all details, will protect you from any contractor-caused issues or HOA limitations.
© Copyright 2018. Urban Equity Group USA, Inc, Jupiter, FL.