Should you buy a fixer-upper or wait for the right property?
In principle, there is a lot to be said for buying a fixer-upper, especially for younger adults, as they can significantly increase the value of the property they buy, which will benefit them for their next purchase.
At the same time, the practicalities of improving a fixer-upper can be a lot more challenging (and less entertaining) than certain TV shows might make them appear.
In other words, there is no “one-size-fits-all” answer to the question of whether you should be a fixer-upper or wait for the right property, but there are some points to consider.
How good are your own DIY skills?
If you’ve been wielding power tools since you were in high school, then you may do just fine renovating a house yourself, although even then you’ll definitely need professional help if the electrics need redoing and you may benefit greatly from professional help in other, specialist areas, such as plumbing.
If, however, you’ve never even drilled a hole to hang a picture and don’t know how to use a stud finder or a spirit level (or laser level these days), then you’re either going to need to budget for professional help or accept that you’re going to go through a steep learning curve.
This option might however,turn out to be painful (literally and figuratively) and might work out more expensive than just paying for a professional in the first place.
How good are your project-management skills?
Turning a fixer-upper into a habitable property usually takes more than just DIY skills. It generally takes people skills, budgeting skills and time-management skills as well.
Again, if you’re not up to this (at least not alongside a full-time job) then you will have to employ a project manager.
Do you have substantial cash savings?
It’s common knowledge that lenders love big deposits and they love them even more when dealing with non-standard properties such as fixer-uppers. In some cases, not only will lenders insist on a large deposit, but they will hold back part of the agreed loan amount until the buyer has completed essential work (typically enough to make the property safely habitable).
This means that the buyer will have to put up the money to make the whole payment to the seller and then put up the money to pay for the work before the mortgage lender releases the final part of the loan to them.
Do you have any major life events coming up?
Handling a renovation project and a job is enough to take up the bulk of the average person’s time. It’s fine to have an estimated timescale to completion, but it’s also important to be realistic about the prospect of overrun.
Even seasoned professionals can find timescales slipping if they run into unexpected challenges and with amateurs, realistically, a project is almost guaranteed to take a bit longer than you thought it would.
Because of this, it is usually a really bad idea to commit to a hard deadline in order to be able to move forward with a major life event such as a wedding or the birth of a new child.
Happy to wait?
The idea of owning and house that you stripped back and made your own is a dream of many; but it’s not a cheap dream. If you’re new to the property market and like the idea of a house project but know that it’s something that should be done later in life, go for a new build.
New builds are becoming more and more modern with open plan spaces and the option to personalise it by choosing the materials used through the house such as flooring, kitchen cupboards and even the backsplash on your sinks!
Of course, you could also purchase a property that is much lower than your budget and spend what you have saved on fixing up parts of the house. This might be knocking down a wall to expand the kitchen or to add an extension.
Even small changes around the house can add value and it will give you the experience you need for your next bigger house project.