As everyone now knows (thanks, HGTV!), putting some elbow grease into a home can result in some serious equity! Fixing up a home can be very advantageous … but “can” is the key word. Each scenario has to be looked at individually, and very carefully.
I’ve seen everything from buyers purchasing, fixing, and flipping at a huge profit, to homeowners dumping time and money into homes that at the end of the day cost them money. Obviously very frustrating!
How does one avoid the pitfalls? While there isn’t an easy answer, here are some thoughts:
– Properly evaluate the property. Often this involves getting outside input on a home that may have a number of unknowns, whether that’s from a contractor, trade specialist, home inspector, etc. Don’t just guess; know!
– Get expert help. I can help by providing a (free) assessment of what the home will be worth at the end of the day, after the proposed updates have been completed. Having this knowledge is crucial!
– Know what to do and what not to do to get the best price. I’m happy to go through this with you. You need to know where to focus your time and money. It’s very easy to pour resources into areas that simply won’t yield a return.
– Err on the conservative side. This is not the time to play the optimist! Look at worst-case and best-case scenarios. Round up on expenses, down on returns. Get multiple bids. When it comes to future resale, base your numbers off of conservative estimates.
– Be careful going off of the “feel” of a home. Sometimes the filthy home with nasty paint colors, holes in the sheetrock, and horrible carpet is really a better choice over the very clean, very dated home that just isn’t going to have the resale value when your project is finished.
– Factor in all future closing costs and commissions if resale is in the plans. No one wants to see their projected profits eaten up by normal seller closing costs and commissions when it comes time to sell.
If you’re looking to purchase a home to fix up and increase resale value, or even just considering improvements to your own home before selling, I’d be happy to sit down and discuss your plans and provide professional input at no charge!
Advantage Alaska Real Estate/eXp Realty
“Your home sold in 90 days, or I’ll sell it for free!”
P.S. ~ My goal is to always do an excellent job for my clients. If I’m doing a great job for you, please consider passing my name on to others who are looking to buy or sell real estate in the local area!