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

Fixer-uppers are back in style. Homeowners are remembering that a well-done remodeling job can save them a lot of money.

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 an 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.

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 National Association of Realtors’ HouseLogic.com offers more details on inspecting foundations.

4. Inspect the roof

Get a home inspector or trusted roofing specialist to tell you if the home needs a new roof, which can cost $20,000 to $40,000 and up.

5. Scrutinize bathrooms

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

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.

8. Watch for rot

Rotting wood is another red flag. Use a pencil to push on trim and the wood around windows, and look for soft or crumbling wood.

9. Inspect drywall and floors

Keep an eye out for flooring or drywall that is:

  • Stained
  • Uneven
  • Warped
  • Discolored
  • Peeling

These can indicate rot or mold.

10. Run from bad siding

Deteriorating siding raises a red flag for two reasons:

  • It’s expensive to replace. Depending on the material you choose, new siding can start at $10,000 to $13,000. Costs increase with the size and complexity of the job.
  • It may indicate other problems. Siding may be rotting, blistering or disintegrating because of rot or mold hiding behind the home’s exterior.

11. Beware leaky windows

If you want to replace old windows with new, energy-efficient ones, that’s cool.

But be careful of committing to a home with leaking windows. Water seeping into a home through window leaks can cause untold — and unseen — problems from rot and mold. You can’t tell how bad the problems are without removing the windows.

12. Spot a bad location

Become an expert on the neighborhood. Bargain homes are often in less desirable areas. Knock on doors on the street and chat with neighbors about crime. Your job is to assess how bad a neighborhood is and whether it’s really going to turn around.

Check out: “20 Tips for Buying a Home in the Best Location, Location, Location.”

13. Look for pests

You’ll need an expert to tell for sure if a pest infestation is present. But you can spot some telltale signs, including:

  • Insect wings left on sills (a sign of termites)
  • Teeny sawdust piles along baseboards (carpenter ants)
  • Urine stains, odors or scrabbling sounds (rodents)

The legal experts at Nolo.com describe tip-offs to other pests.

14. Hire a home inspector

Once you’ve found a home that passes muster, hire a well-regarded home inspector to professionally look at the structure from top to bottom. This typically costs a few hundred dollars. Don’t buy a home without a professional inspection.

You can locate inspectors in your area on the website of a national organization like the American Society of Home Inspectors.

15. Inspect after a rain

See if you can schedule your home inspection right after it rains. Visiting at that time lets you and the inspector see if water accumulates around the foundation — a bad sign, as it can cause leaks and foundation problems.

Have you bought a fixer-upper? Tell us about it in the comments below or on our Facebook page.

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