The dream of many is to buy a little, rundown home and turn it into a beautiful piece of property that can be sold for several times the price they paid. It's a dream that often doesn't make it into reality, for a variety of reasons. Perhaps they never actually get around to buying that fixer-upper, or maybe they do, but are never able to finish it or find that it will require sinking entirely too much money into the place to make it worth selling again.
To avoid this problem and actually make money with fixer-uppers, you need to do some research. Here are a few ways to ensure that you are getting a home that can actually be fixed up and that will earn you some real money when you finish.
Have the house inspected. Bring in a pro to inspect the house before you put an offer down. This should let you know whether or not there are any hidden surprises that you need to know about, like termites in the basement or cracked foundations, both things that can end up needing far more work than you anticipated.
Learn some skills. Save money by doing your own basic repairs. If you know a little something about plumbing, you can redo the kitchen pipes. Some areas, like electrical, require a qualified professional, but many other things you can do on your own, including flooring, painting and replacing carpet.
Crunch the numbers. Rather than jump into the first fixer-upper that appeals to you and looks doable, run the numbers to see if you can actually make a profit. Source the paint, carpet, etc. and figure out how much you will actually have to spend in order to make the home saleable. Then add 10%. If you still find that the numbers work for you, and then go ahead. Chances are you will be able to make a decent profit.
Work the barter system. Bartering is a great way to get services without having to pay actual cash. Let's say you are able to paint lovely murals and you know someone who can do roofing. You paint murals for them, they do the roofing for you and you are only out the cost of materials. It can be an excellent method of getting things done on your fixer-upper and keep costs down. You'll only have to invest your own time in order to get services in return.
Talk to previous owners. If the current owner hasn't been in the house for long, you may want to talk to those who lived in or owned the home before. This can give you a good idea of repairs that have been done and work that may be needed in the near future. If previous tenants complain about the water heater, you will know that this is something that might be needing replacement shortly.
Buying a fixer-upper can be an exciting prospect and definitely a good way to earn some money in a relatively short period of time . . . but only if you know what you're doing! Make sure you have a clear idea of what you are getting yourself into and figure out if you are actually going to make a profit. Then go ahead and buy your dream home, fix it up and sell it for a big profit!
