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

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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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