For many people, the idea of a fixer-upper property at a discounted price can seem appealing, but is it right for you? We will let you know what to look for if you want to buy a fixer-upper house in Chicago!
There are many types of people who might be interested in purchasing a fixer-upper property. You might find investors and bargain shoppers all looking at the same home. What is your motivation for purchasing? A person looking to purchase their eventual dream home might not buy the same way a house flipper might.
An investor might not want to purchase a house they aren’t sure they can resell quickly or fix for a low cost. Whereas someone looking for a long-term residence will only be concerned with finding the house that is right for them. There are a few things you should always do when buying a fixer-upper property…
Should You Buy a Fixer-Upper in Chicago?
Run the Numbers
And be realistic. What will it cost you to get the house into livable condition? Repairs, upgrades, and small cosmetic details can all add up fast. Seek the counsel of professional contractors to better determine what your repair costs will be. And while you’re at it…
Expect the Unexpected
Construction projects are expensive. There are always extra improvements you will need and additional trips to Home Depot you will find yourself making. When you purchase a fixer-upper, you should be prepared with a savings cushion to cover your “unexpected” costs.
You Might Get Dirty
If you enjoy DIY, buying a fixer-upper house can be a great project. However, just because you have seen a few shows on HGTV, doesn’t mean you should attempt to frame in a new closet without some help. Do as much as possible on your own, but also know when it is time to call in a pro.
Inspect, Inspect, Inspect
You know you are buying a house that needs work. However, you should know exactly how much work you’re looking at. Have the house thoroughly inspected for all the things you don’t see on your own. In addition, you might consider specialty inspections for things the average inspector can’t see. Septic tanks, plumbing and what’s really behind the walls should all be closely looked at. Your offer should include inspection contingencies. If the house fails the inspection miserably, you might want to reconsider your purchase and find something less burdensome.
Home equity and renovation loans are available to help you fix up a property. One of the most common types is the FHA 2039(k). Another popular choice is the Fannie Mae Homestyle Renovation mortgage. Both loans will help you buy AND fix up the house. If the house is only in need of small fixes, you might be able to finance them using a low-interest credit card.
Buying a fixer-upper property can be a huge commitment both time-wise and financially. Make sure you know what you are getting into and understand the effort you will need to put forth. Some people don’t plan for the expense of time it will take to fix. Don’t fail to plan and find yourself stuck with a house you aren’t even able to live in! Many people get in over their heads! If you a first-time buyer, and are looking for a fixer-upper property, make sure you have a knowledgeable and experienced team of real estate professionals available to help guide you through the process.