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

Homebuyers looking for a bargain often consider fixer-uppers. It’s a great idea, but only if you know how to choose the right property.


Fixer-uppers are back in style. During 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. But others are finding that, done correctly, remodeling a fixer-upper can save a lot of money. Fixers are getting attention because:

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

However, 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 and generally to be avoided. 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.

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 and up.

In an article on assessing fixer-uppers, Consumer Reports 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.

6. Avoid ancient plumbing and wiring

The presence of these elderly building materials is a sign of trouble:

  • Galvanized steel pipes: Sediment can build up in the pipes, and they may leak and corrode.
  • Aluminum wiring: It’s a potential fire hazard.

Replacing a home’s plumbing and wiring are budget-killers involving thousands — if not tens of thousands — of dollars.

7. Back away from funky smells

If your nose wrinkles when you enter a home, that’s a sign of problems. A home that emits bad smells may have a dangerous gas leak, sewer or septic problems, or mold — all of which require expensive remedies. Save your money for improvements you can enjoy.

Musty and dank smells come from mildew or mold and disqualify a home from consideration. Mold is not always visible; it may be inside walls. Don’t assume you won’t find mold in a dry, arid climate. It can be caused by condensation inside walls.

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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.

    • Jason

      I would rule out buying a new house unless you actually have it built. Modern spec houses are junk, built to the lowest possible cost. It is way cheaper to build a house right than to try to fix it after the fact.

    • I don’t think that’s true at all. The house we bought seven years ago certainly wasn’t new – in fact, it’s older than we are – but it was structurally sound, with a workable floor plan and no mold. (Some radon, but the seller remediated that.) We’ve done quite a bit of work on it, but none of the problems we fixed were actually dangerous.

  • 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..

    • Synthetic1

      You’re right, most houses 1500-2500sf can usually be reroofed for under $15,000 and some down to $6,000. However, I had one listing which was 3,500sf plus 800sf garage with cedar slat roofing, steep pitch and heavy on the detail work which had estimates of over $100,000.

      Quality of materials and workmanship create a range. A recent 2800sf single-level home had estimates ranging from $12,000 to $16,000 plus any excess underlayment needs. Here the higher estimate came from a well-known, trusted and experienced roofer (they come back even 15 years later to fix issues) and the other cam from the opposite. My client hired the lowest estimate and guess what, they installed the edge flashing on TOP of the end-edge of the shingles! Fortunately, when called on it they came back and reinstalled all of the edge flashing.

  • 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.

  • Synthetic1

    Smart refurbishers try to know exactly what they are buying, get the work done with style, sell and make a living. Over and over again.

    Unsmart refurbishers don’t know how to go about knowing what they are buying, get shocked, and lose money. But usually just once!

    • bigpinch

      “Smart refurbishers try to know exactly what they are buying, get the work done with style, sell and make a living. Over and over again”
      Yes, that’s certainly one way to go about it. Nothing against that plan. But it is also possible to look at a house as a long-term home; not just an investment.
      Many younger people need to look at a house as an investment instrument because their career paths may take them to many parts of the country. In that case, you have to look at building equity in a piece of real estate in a market where the property can be sold with relative ease and then transferring that equity to another property, as necessary, building up the total equity, the while.
      In our case, the primary concern was finding a property that fit our immediate desires and future plans (which necessarily included larger than homestead acreage). I didn’t want to allow for the possibility of our moving somewhere else as the exigencies of my career might dictate.
      Owing to some market circumstances peculiar to Texas and peculiar to the 30+ years of owning this particular property, we immediately lost money on our investment and then saw the property valuate way beyond our wildest dreams (or desires). I had intentionally located property outside of the projected Austin development plan but nobody predicted the increase of people moving to Texas.

  • Kent

    All houses need constant fixing up. It’s all a matter of degree. And don’t forget, houses have a limited life expectancy, yet we pay for them like they last forever.

  • Tom

    #14 hire an inspector is the most important as a good one can help you navigate all the other issues. Don’t balk at the cost, the info is worth it and may save you many times its cost. I got out of a deal that looked good, but the inspection revealed potentially big issues with big costs that the sellers wouldn’t budge on. And even if the problems an inspection reveals are fairly minor at least you know what you are getting in to and what jobs to tsckle first.

    I’ve bought 3 fixer uppers and one strategy has helped us – the houses needed lots of work but they were liveable and safe (but rough, even primitive) while the repairs and upgrades were made. On all three it was mostly DIY with pros brought in for jobs beyond my skill or requiring special tools.

    Now back to the flooring project I’m just wrapping up :)

  • bigpinch

    There’s a lot of good information in this article. There’s a lot that wasn’t said only because there is so much to be said and I don’t have a comprehensive plan for relating my own experiences, having bought a “fixer-upper.”
    My house was such a “fixer-upper” that it didn’t even figure into the price of the property; it was being sold as raw land. The doors were off the house, a couple of windows were completely knocked out. My neighbor’s horses were using it as a place to get out of the rain and, prior to that, illegal aliens were stacked in here liked cord wood. They nearly burned the house down because they pulled some of the cedar siding off the house to feed into the wood-burning stove which chimney had rotted through as it passed through the wall, thus setting the rest of the siding on fire.
    After spending money on it, and encountering problems that I never imagined could happen, I have often thought that I would have been better off burning down the house and starting fresh.
    That’s a totally emotional reaction. Had I bought a “normal” house in the “hot” real estate” market of Austin, Texas (where I moved from) I would have had an entirely different set of stressors having to do with City permits, ordinances, Home Owners Associations, and other things.
    So, I have continuing issues with this little shack in the weeds. Well, it’s mine. It’s paid off. My property taxes are incredibly low. I am still capable of doing the maintenance on the house whether it meets other people’s expectations or not. I do it at my own pace. I don’t have to put up with neighborhood standards or other inventions of local busy bodies. Not to say that I live in squalor. It’s just that the neighbor’s opinions don’t rule my daily life. This attitude will be totally alien to people who think they have a right to tell other people what to do.

  • freakydeaky

    How about cracks in the walls, windows and doors that don’t open or close correctly………….

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