Investing in a Fixer-Upper: Advice for First Time Buyers
Category Advice
Buying and restoring a fixer-upper has a certain appeal if you love getting stuck into a big project. This venture can be incredibly rewarding with the right property, an exciting vision, and careful planning.
If you are a first-time buyer with your eyes set on purchasing a property that needs some work, doing your homework is always a good place to start. Buying a run-down property can be a great investment. That said, it's important to approach your decision carefully, armed with good advice.
Here are some tips for first-time property buyers who want to purchase a fixer-upper:
Establish your budget
Determine how much you can afford to spend on the property, taking into account both the purchase price and the estimated cost of your planned renovations. Be realistic about your financial situation and make sure that you have enough funds for unforeseen expenses. Create as much breathing room as you can.
Evaluate the condition of the property
Conduct a thorough inspection of the property to identify its strengths and weaknesses. Look out for any structural issues, plumbing and electrical problems, and any other major repairs that may be needed. This will help you assess the potential costs and decide if the property is worth the investment. For this phase, we strongly recommend bringing in compliance professionals to conduct these inspections.
Prioritise your renovations
Make a list of the necessary renovations and prioritise them based on their importance and cost. Focus on projects that add value to the property, such as kitchen or bathroom upgrades, roof repairs, or improving the curb appeal. Cosmetic issues can always be tended to later if your budget allows.
Get multiple contractor quotes
Obtain quotes from different contractors to get a realistic estimate of the renovation costs. Compare the prices, check references, and review their previous work to ensure they are reputable and capable of handling the job.
Plan for contingencies
Renovation projects often encounter unexpected issues and expenses. It is always wise to set aside some funds as contingency cover for any unforeseen repairs or complications that may arise during the renovation process. You may not need it, but you'll be glad you set it aside if you do.
Research permits and regulations
Familiarise yourself with local building codes, permits, and regulations. Make sure you obtain the necessary permits for the renovations you plan to undertake. Non-compliance can result in fines or delays. Doing this right from the beginning will help make the whole process smoother.
DIY vs. hiring professionals
Assess your own skills and determine whether you're capable of handling certain renovations yourself or if it's better to bring in the professionals. For some tasks, such as painting or minor repairs, a DIY approach is great. Others, like electrical or plumbing work, should be left to professionals for safety and compliance reasons.
Consider financing options
Look into the financing options available for purchasing and renovating a fixer-upper. These may include traditional bonds, renovation loans, or specialised loan programs specifically designed for renovation projects. Take the time to research and compare the terms, interest rates, and eligibility requirements of each option.
Think long-term
While fixer-uppers can be profitable investments, consider the long-term value of the property. Choose a location with growth potential, and aim for renovations that will increase its market value. Weigh up your immediate needs with the potential for future returns, and take it from there.
Buying a fixer-upper requires careful planning, budgeting, and a realistic assessment of your skills and resources. With proper research and preparation, you can turn a neglected property into your dream home or a profitable investment as a first-time buyer.
Need help navigating your first property purchase? Give us a call!
Our team of seasoned agents have helped countless clients through all sorts of property purchases, and guided them right through to the key handover. We would love to meet with you to discuss your needs and set up some initial viewings. Contact an SAproperty.com agent near you today!
Author: SAProperty.com
