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Five Tips For Making A Fixer-Upper Pay Off

June 20th, 2011 9:07 AM by Eileen Denhard

Five Tips For Making A Fixer-Upper Pay Off


A home that needs major renovation can offer a lot of personal satisfaction and return on investment but it can also be a lot of work. Realtor® Rowan Samuel of Naples, Florida shares his experience of owning investment properties and shares five things that those thinking of buying a fixer-upper need to consider:

When we lived in Philadelphia years ago, we had several investment properties that we rented out. Most were “fixer uppers” that we picked up – the lowest priced house in the best neighborhoods. I was always going to Home Depot for something or another – they eventually knew me by first name I was there so often.

Realistically, the majority of fixer-uppers are in complete disrepair, meaning that it will cost you more to “fix it up” than to purchase a home in move-in condition.

However, if you are serious about buying a sound fixer-upper, here are a few tips on finding a sound fixer-upper:

1) Look in neighborhoods with resale potential
2) Try to find a home that has been listed for sale for several months
3) Always estimate your fix up costs before buying
4) Avoid homes requiring structural improvements
5) Avoid major additions, such as adding a family room or bedroom

The industry standard rule of thumb is to buy a fixer-upper for at least 20 to 30 percent below its “fixed-up” market value. It’s important to avoid both under-improving and over-improving a fixer-upper; in either situation you will not realize a good return on your investment.

Posted in:General
Posted by Eileen Denhard on June 20th, 2011 9:07 AM



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