Considering a Fixer-Upper? 15 Ways to Avoid a Money Pit

Unaffordable home prices are pushing some buyers to consider fixer-uppers — a great idea, but only if you know how to choose super carefully.

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Fixer-uppers are back in style. Ask any fan of the HGTV show “Fixer Upper.

In the housing boom, few homebuyers wanted to bother with renovation projects. New homes and those in move-in condition were the ideal.

That’s still true for many buyers. Maybe most. But other homebuyers are finding that, done correctly, remodeling a fixer-upper can save lots of money. Fixers are getting attention because:

  • Home prices are high in many cities, and a fixer-upper may be the only affordable choice, at least in neighborhoods you want.
  • Home decorating and improvement TV shows inspire many buyers to turn to remodeling to get the home that’s perfectly suited to them.
  • Lovers of period homes always want to lovingly restore old structures.

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Fixers with true potential

The wrong remodeling project can become a money pit that strips your bank account right down to the studs.

Here are 15 ways to identify the fixer-uppers worth your time and money:

1. Make cool calculations

Bring a cold analytical eye when shopping for a home to renovate. Put your emotions in the back seat while you assess each home’s possibilities.

2. Love the floor plan

Look for a floor plan you can live with. Moving load-bearing walls is an expensive proposition. SFGate tells how to identify load-bearing walls.

3. Start with the basement

Inspect a home thoroughly, inside and out. Check inside and outside the basement or foundation for exposed wires and pipes, cracks in the foundation or water pooling around the home.

“The biggest problems in a house typically arise as a result of poor stability in the structure or foundation,” contractor Tyson Kunz told Bankrate.

MSN Real Estate says:

Drainage and foundation repairs are thankless expenses that can run tens of thousands of dollars. To detect foundation trouble, tour the exterior, checking for cracks. If you can slide a quarter sideways into a crack, it’s too big.

Wise Bread says:

[A basement] can provide valuable clues on the quality of construction; condition of the HVAC, plumbing and electrical systems; and how well previous owners have maintained the building. Avoid sagging floor joists or unstable supports, ancient heating and AC systems, leaking water heaters, and electrical panels with loose wires.

HouseLogic and About.com offer more details on inspecting basements.

4. Inspect the roof

Get a home inspector or trusted roofing specialist to tell you if the home needs a new roof, which costs $20,000 to $40,000 or up. “The investment won’t increase the home’s resale value or your pleasure,” says MSN Real Estate.

Consumer Reports, in an article on assessing fixer-uppers, says:

Runaway water can wreak havoc on any home and a leaky roof is its quickest way in. If the home has an asphalt roof, look for cracked, curled and missing shingles. Gutters, downspouts and leader pipes should also be in place to collect rainwater and channel it away from the house.

5. Scrutinize bathrooms

Bathrooms deserve special attention because leaks cause rot and structural damage.

“Sloppy showers lead to repeated occurrences of water on the floor that seep through into the floor of the bathroom and adjacent rooms,” says HowToManGuide.com.

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Comments

  • Rod

    After omitting all of the potential problems listed here, there isn’t much room left other than buying a new home.
    We bought a house with a barn on 5 acres 30+ years ago for less than $35,000. We’ve poured money into it ever since, but we now have the home that we dreamed of. The house needed major work, most of which I was able to do myself. I hired help to help me insulate, new siding, new windows, new roof, new chimney, etc. The barn had to be torn down, but after the kids had so much fun in it. In the hayloft they had a pool table, TV, davenport, and basketball court with sodium lights from when the town upgraded. So, if you’ve got the “stuff” to do it yourself, you can, just know what you are getting into. Our home was assessed to be worth $250K and I know we probably stuck about $125K into it which includes a sunroom addition and a 2 1/2

    car garage. It was a great learning experience and I find things that I’d have done differently.

  • http://peertopeerlendingsites.tumblr.com Rick Banks

    You know I have to say that in my part of the country, which is in Virginia, fixer uppers never when out of style. It just stopped making the news. Especially during the height of the housing crises. But I never stopped seeing run down housing sitting for a while. Then a crew working on it. Then a For Sale sign in the yard.

  • Cyndinca

    Re-roofing a house does not cost $20,000 – $40,000.
    When I bought my 1988 home it had the original cedar shingle roof that was nearing the end of it’s life span.
    I had the whole house (some 2,800 sq.ft of roofing area) replaced with a new 30 yr. asphalt shingle roof for $7,200.
    This included attic inspection, new OSB, tar paper, asphalt shingles, flashing, drip edging, 11 new roof vents, painting of my existing vents to match the drip edging + smoke detectors for all the bedrooms. All was done to code & stages signed off by the city bldg. inspector & permits handed to me.
    I don’t know who came up with the $20k-40k figure but it’s a gross exageration..

  • Lorilu

    I think it’s more important to focus on the soundness of a home’s structure, foundation to roof, and avoiding major, hard-to-fix problems like wet basements, foundation problems, poor grading, etc. A leaky water heater can be replaced for a couple of hundred dollars, and a new furnace, while costing several thousand, will probably bring large energy savings. Even doing repairs like a service upgrade to an older electric panel or adding central air conditioning, etc., would be worth doing to a good building in a good neighborhood.

    The idea to knock on doors and chat with neighbors about crime is laughable. Nowadays, it’s highly unlikely anyone will talk to a stranger who knocks on their door, and they’re unlikely to say anything negative that might hurt their neighbor’s sale. If you want crime statistics, they’re available on line, right down to the local police blotter. School statistics are also available online. You should look those things up before you zero in on an area to shop for a home.

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