Getting Started

5 Reasons to Buy a “Fixer-Upper”

 If you are the type of person that doesn’t shy away from DIY home remodeling projects or you have had lots of previous experience in completing DIY remodeling, then you may want to seriously consider buying a fixer upper home.

Buying a fixer upper could be seen as an amazing investment for someone who has an attention to detail and experience in construction as they will be able to make easy updates to the home in order to increase its value and living appeal. Buying a fixer upper can make it much more cost effective to carry out home renovations and have money set aside as soon as you purchase a new home.

Most people will generally purchase a home nearing the maximum value of their mortgage and in the process will not have much room for making renovations or improvements. By purchasing a fixer upper you can see amazing benefits such as.

  1. A direct cost savings on the price of the home: This can allow you to purchase more land, or a larger home for much less money than other houses that you may have looked at.
  2. More room in your budget for improvements: Just because a home may not have all of the features that you want, that doesn’t mean that you should take that home off the table as a potential place to live. If you can get a home for a reasonable asking price, you can work on the home using DIY home remodeling projects to put in an extra bedroom, bathroom or function that you would like in order to be comfortable.
  3. Increase the value of a home: By fixing up a fixer upper home you can substantially increase the value of that property. Many investors with DIY remodeling experience will continuously “flip” homes. By purchasing a house far under its market value, adding value into the home and fixing it up, a DIY home improvement specialist can very quickly add value to a home within just a short time which makes it a very good investment.
  4. Less competition and market flux: There can be a lot of competition in real estate and when you are trying to purchase a home you will run into rising and falling costs with homes depending on your local real estate market. Fixer upper homes will always be discounted deeply because of the condition of the home or because it has sat on the market through a variety of real estate changes. As a result you will not have to worry about buying at the right time or facing any competition in a bidding war.
  5. Learning new skills: Any of the DIY home project skills that you learn when you own a fixer upper can easily be transferred into other construction projects in your own home or others homes. These transferable skills will help to save you money on repair bills!

Ultimately a fixer upper home is not something that is ideal for everyone. It is important to do the research and never take on anything that you can’t handle. Major construction and issues with the foundation or physical construction of the home should always be handled by a professional. If you can find a home that is in a bit of disarray, and a home inspector deems the property safe, go ahead and make an offer to get started in DIY paradise.

Be the first to comment - What do you think?  Posted by muellerd - March 21, 2013 at 6:54 PM

Categories: Getting Started   Tags: , , , ,

Benefits of DIY Home Remodeling

Remodeling a house on your own is rewarding to say the least. The benefits of doing all the labor yourself can be self gratifying and save you lots of money. I chose to do as much home remodeling on my own as I could and was able to make a substantial profit once I sold the project home.

DIY vs The Contractor

By doing all the work yourself you are going to save money – period.
Lets say the cost to purchase a 1000 square foot home (needing a remodel) is $50k. Suppose the cost to remodel this home would require around $30k in materials. Typically you could expect to pay a contractor 125% of the material cost just in labor. Thats a whopping $37,500.00 just for the contractor labor. All together thats going to bring your total home remodeling cost up to $67,500.00! Now add in the orginal purchase price of $50K and that makes the total $117,500.00.

Typical Home Loan Financing

DIY Method Paying a Contractor
Home $50,000 $50,000
Material $30,000 $32,100 (assumed 7% markup)
Labor $0.00 $40,125
TOTALS $80,000 $122,225
30 yr Mortgage @ 4.0%
Monthly Payment
$381.93 $583.52
Total Money Spent $137,495.67 $210,067.61

The DIY savings are huge! A grand total savings of $72,571.94

Thats almost the original cost of the whole home remodeling project if you do all the work yourself!

 

Be the first to comment - What do you think?  Posted by muellerd - March 18, 2013 at 9:12 AM

Categories: Getting Started   Tags: , , ,

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