The chances are good that you’ve seen “reality shows” featuring BEFORE/AFTER home renovation projects. While these popular home improvement shows have made buyers more interested in fixer-upper properties, they also have the potential to create unrealistic expectations. Consider these five common myths about “fixer-upper” properties.
Myth #1 – It’s Easy To Find A Good Fixer-Upper
This may have been true over a decade ago when home prices were rising. It seemed easy enough to sell a house for a handsome profit after a few easy updates. While there are still good investment opportunities in today’s market, it takes some time and effort to find them. If you want to bargain-hunt, understand that you will be competing with investors who likely have extensive experience and are often able to pay cash.
Myth #2 – I Can Save (Or Make) A Lot of Money
Renovation costs vary widely depending on how much work is needed, who is doing it, and other factors. Professional real estate investors suggest that the budgets quoted on home improvement shows are unrealistically low and the final resale price is overly optimistic.
This could be due to regional cost variations. However, many expenses are completely overlooked, including transaction costs (closing fees and commissions), building permits, dumpsters, insurance and other carrying costs.
It’s also possible that the “real world” cost differences stem from comparing cosmetic updates to more expensive structural issues or requirements to meet stricter building codes.
Myth #3 – Things Will Go According to Plan
Most renovation projects require strong doses of both patience and tenacity due to cost overruns, delays and unexpected repair issues. While the reality shows often include a “bad news” discovery, these “surprises” may be designed to merely inject a little drama into the story. With real life “fixer-upper” homes, things rarely go according to plan.
Myth #4 – It Won’t Take Very Long
Finding, purchasing, and moving into any home is a time-consuming process. Add a major renovation project or the need to find buyers when the project is complete extend timelines even more.
Home improvement shows give the impression that everything falls into place at lightning speed. Of course, an episode that only featured waiting on inspectors to show up, or a delayed delivery of new windows is about as interesting as watching paint dry.
Myth #5 – It Will Be Easy To Nail The Design Updates
The proliferation of home renovation websites has armed consumers with many excellent design tips. However, good home design still requires both skill and judgment, and there are a number of ways things can go wrong.
In an attempt to impose a particular style on a home, important architectural details might be inadvertently removed, such as solid wood six-panel doors or elaborate moldings. Or, the purchase of any home can go wrong by executing the updates poorly.
When you’re thinking about a home remodel project, or possibly embarking on your own “fixer-upper” investment, give me a call and let’s discuss your ideas!
Source: Real Estate Buyer’s Agent Council, Inc., Newsletter, March 2018