Buying a Home (the smart way!)
We often hear people say how they want to buy a "fixer" so they can put some sweat equity in. This way of thinking can hold true for a handful of buyers. A few things to consider when looking for a "fixer"; How much work needs to be done? How sell-able is the floorplan? Will you live in the home during the renovation? How long do you plan on holding onto the home? What is the value AFTER the renovation? Savvy Investors know these questions all too well.
If all of these don't line up exactly perfect it will likely be a bad idea to renovate for a few different reasons.
We have all seen the popular show where they have a Realtor and Interior Designer working with a seller. After the renovation is complete they have to decide if they will stay in their home or if they still want to sell it. I have been surprised by the number of people who have decided to stay in their homes after they have renovated them. I believe there are a couple of different reasons for this. 1. They used up most, if not all of their equity doing the renovation. 2. Their reason for wanting to move was eliminated as the things they saw as "issues" with their current home were gone.
These are some hard numbers to figure when looking at a renovation. I recently ran across an article (click here) where they were comparing various renovations and what the expected return value when the home is sold.
The most popular renovations are kitchen, bathroom (master or other), roof, deck/patio/landscape. As you will see from the chart above these renovations bring slightly above a 50% return on the cost of investment. This seems to turn the idea of buying a "fixer" on its head.
What we have seen over the past 10 years are sellers who, due to economic conditions, ended up staying in their homes longer than they had originally planned so they made the decision to make lemon-aid out of their lemons and design their home exactly the way they wanted it. They often spent considerable amounts of money making the home they were in the home they had been dreaming of.
Let me suggest an alternative. Rather than taking on the burden or inconvenience and financial risk of a renovation maybe you should start looking at homes where the seller has already taken that burden. They are they ones taking the lower return on their renovations. This way of thinking equates to more home for YOUR investment in your pocket.
We have one such home listed currently. Our listing at 3619 Senna Way
has had thousands upon thousands of dollars lovingly poured into it making it truly an incredible value for the Buyer! Move in ready, you won't have to lift a finger, other than maybe as you enjoy your glass of wine on the back patio! See photos of this incredible renovation below. Click here or call us at 970.414.0956 for more information