Should You Buy a Fixer Upper as Your First Home?
In this hot seller’s market, first-time buyers are having a tough time entering the market. Last month, we spoke with a frustrated first-timer who had seen many homes go to bidding wars, selling well over asking price.
With costs rising, it’s tempting to look for a “fixer upper”. Fixer uppers can offer the opportunity to live on a nicer street and make it your own with a lower upfront cost. Older homes also bring unbeatable character and charm. They just don’t make ’em like that anymore! Plus, you stand to make money if you do a good job fixing it up while managing costs.
But do consider if it’s the right situation for you, and avoid biting off more than you can chew. This month we’re chatting with Trish, a young homeowner who purchased a century home in Cambridge with her husband Justin 3 years ago. She filled us in on her experience, and helped us put together this list of things she encountered that you should consider.
What type of work does the house need?
Know exactly what you’re getting into to make sure your investment remains profitable. A home inspector or trusted contractor can help you determine the extent of the work a home requires.
How is the house heated? Oil is expensive to maintain, and ducting your new house and installing a new furnace is expensive. Does the home have knob and tube wiring? You can’t insure a home until that is replaced. Is the home well-insulated? Most homes over 60 years old have double-brick insulation which makes heating and cooling expensive. Trish and Justin tackled heating and electrical, but opted to stick with their double-brick insulation. You can take it down to the studs to insulate it, but that also requires significant time and money.
Have a professional check out the basement too. Is it dry? Are walls and door jambs level? If not, you may be looking at adding a significant amount to the budget. But if you manage to find a home with good bones, brimming with character like Trish and Justin did, score!
Who will be doing the work?
Paying a professional to do the work is faster and typically ensures a much higher level of quality than a DIY job. Plus, Trish warned that there are certain jobs that should always be done by a certified pro including plumbing, electrical, and HVAC. Hiring professionals means you’ll have to set aside a large budget for labour, but the work will be done right.
Should you DIY parts or all of the work?
If you do decide to tackle some or all of the projects yourself, be honest with yourself. Taking on a big renovation in addition to your day job can be taxing. Do you have the skills, knowledge, and time to dedicate to projects? Will things be completed at an acceptable pace? This can be tough if you are only working on them in your spare time.
Do you have a fallback plan?
Whether you hire a professional or DIY, it’s always possible that your renovations will take longer than expected or run over budget. Some parts of your home may be unusable while the work is being completed. Do you have a convenient place to stay if things run long? Trish and Justin were able to stay with family during part of their renovation. Do you have access to extra cash if surprises happen or you need to hire a professional last minute?
Are you ready for some ongoing work?
Trish admits the work never stops with an older home. Luckily, she has a knack for making things beautiful and Justin has the skills to make a lot of it happen. Is the idea of ongoing maintenance exciting or daunting to you? If you’re buying with somebody, make sure both parties agree on this. Sometimes, it will be something major. Other times, you’ll just do a lot of vacuuming (Trish curses her plaster and lath walls for that one!).