It’s in a great location. It’s in a price range that you can afford and that’s much lower than the average for the area. The listing says it “needs some TLC.” Should you buy it? The answer is: it depends. Buying a fixer upper can be a great investment. However, it can also be money-guzzler that’s far more trouble than it’s worth. Business coach and host of retreats Robyn Gooding and her husband are fixing up a house in British Columbia. She shares her do’s and don’ts of buying a fixer upper in 2022 (along with some of our own).
Do: Consider the Location
Robyn says that the first thing you should look at when you want to buy a home is location, location, location. That’s even more important for fixer uppers. If you buy cheaply in a great neighbourhood, you can recoup your investment and then some. If you buy in a poor location, though, you’ll spend lots of money on a house that you won’t be able to sell at a profit. She also says buyers should consider views, natural light on the property and potential nuisances, like a school or hospital across the street.
Do: Get an Inspection Done
Want to know how to buy a fixer upper and renovate it without finding yourself fixing surprise problem after surprise problem? Get a professional home inspection done. If you focus on the right things to ask during a home inspection, you can get a good idea of what needs to be fixed and what potential problems you may have to deal with down the line.
Do: Consider the Layout
The best fixer uppers have a good flow, three or four bedrooms and more than one bathroom. Don’t just look at what is there, though, but at what could be there. Then consider what it will take from what is to what could be: will you have to knock down walls? Can you knock down certain walls? Have you thought about the downsides to open-concept living? Robyn says you should ask yourself if you can modernize while keeping those original features that give the house its character in the first place.
Do: Consider the Easy Fixes
Robyn explains that fixing up a house doesn’t necessarily need to involve big projects. Often it only takes a new coat of paint or wallpaper (like this example from Masters of Flip), some new doors and fixtures, refinishing the floors and maybe adding a deck to turn a fixer upper into a dream home. If you’re going to get a big return on a small investment, that fixer upper is definitely worth buying.
Do: Consider the Time and Skill Involved
When you think about the pros and cons of buying a fixer upper, remember that getting it from where it is to where you want it to be takes considerable time and skill. If you don’t have the time, skill or inclination for tackling even the simple simple DIY home upgrades, you’ll need the money to hire a contractor and the time to supervise that contractor. Don’t assume that you can just rope in family and friends to help you for the cost of pizza and beer.
Don’t: Try and Do Everything Yourself
Robyn says that one of the most important things to know when buying a fixer upper is what you can’t – and shouldn’t – do yourself. Patching a wall is easy enough to DIY with a few YouTube videos to guide you but unless you’re a qualified and experienced plumber or electrician, those are the kinds of home reno projects you should always hire professionals for: in fact, local building codes may require it.
Don’t: Cut Corners with Materials
Using inferior materials is a sure way of incurring unexpected costs in the near future. You don’t have to go for the most expensive option but you do need to consider the durability of whatever you choose to use. Always order more than you think you’ll need and always inspect the materials – especially if you use reclaimed materials – for defects before you pay for them.
Do: Do the Math
When you’re thinking of how to buy a fixer upper, it helps to make a list of everything you’ll need to do to first make the house liveable so you can move in soon after purchase. Make another list of what to do to get it to where you want it to be. Rank the tasks in order of priority and get multiple quotes to get a more accurate idea of costs. Work out how much money you’ll need right now and how much you should save up for later. Robyn recommends that you draw up a budget, add 25 to 30 percent to it and stick to it.
Do: Get Your Financial Ducks in a Row
Can a first-time home buyer buy a fixer upper? Of course! However, you need to ensure that you’ll have the money to pay for that fixing upping. Speak to your mortgage lender about your options: you might get a loan that includes the home purchase as well as home improvement costs in the overall mortgage. Also apply for all those The Best Tax Benefits, Rebates and Grants You Can Get for Renovating in Canada, by Province.
Don’t: Spend All Your Money
As certain as death and taxes is the fact that owning a home comes with unexpected costs. Maybe you discover mould in the walls. Maybe a pipe bursts. Maybe there’s a fire or a flood. Maybe a pandemic means you suddenly need to convert your living room into a work space. Robyn recommends the you always have an emergency fund to help soften the financial blow.