Would I recommend buying a fixer upper house as a first time home buyer? Well, before I answer that question let me ask you a few questions:
- Are you fixing up the house yourself? How handy are you?
- How much free time do you have?
- Do you plan on living in the house while remodeling?
- What is your budget?
Below, I will dive into each of the questions to help you understand what buying a fixer upper for your first home really means.
Can You Remodel the House Yourself?
If you have done any research on the topic of fixing homes you probably already know, but labor is the MOST expensive cost when remodeling a house. The material to complete the work typically isn’t too expensive, but paying someone to do it costs a lot. Why I ask if you are going to do the remodel yourself is because it might be more of an undertaking than you realize.
From my experience (flipping over 40 houses) a typically remodel with a crew of guys working takes 60-90 days. Now, the crew of people are professionals who work on the project for 8 hours a day 5 days a week. That means it takes about 700-800 hours of labor to complete a full renovation on a property. Calculating that out, and adding an additional 100+ hours for doing most of the stuff your first time home many months or years would it take you?
How Much Free Time?
The above paragraph leads into this one because it will take you a VERY long time to complete a full remodel on a home. What you should consider is how much free time you have. Do you work 40,50, 60 hours a week? The more hours you work at a normal job the less time you will get to spend remodeling your home. This will add months to the process & really not be worth the energy or effort.
Living in the Home During Remodel
The mess, dust, lumber, smell & misc. stuff all over the place typically gets to the new home buyer quicker than they think. When you are living in a house during a remodel it will ALWAYS be a mess until you are finished. So if the finishing process takes 1-2 years, I hope you are a patient person.
From my experience, I would NEVER live in a home during a remodel as everything is scattered & your day to day life is destroyed by the ongoing projects or problems at the house.
It takes a specific type of person & personality to be able to do this! Please consider all options prior to taking on a fixer upper:)
What is Your Budget?
If this is your first remodel, you will most likely go over budget on renovations. You might think, oh I’ll just spend a few extra dollars in the bathroom, then in the kitchen, garage, basement…. the list will keep growing. And that doesn’t even include the unexpected expenses!
I know on some of our remodel projects we have went $10,000-$15,000 over budget in a snap of a finger because a large item like roof, furnace, or basement walls needed to be repaired. Of course, we could have tried to leave them but eventually that expense would come up.
If you are funding the entire project out of pocket please have an additional 20% percent of your original rehab cost for a “oops budget”. This will save you the stress of trying to repair an items with NO budget left.
To Wrap Things Up
If you are looking to take on the project of a fixer upper first time home I want to congratulate you! Even though I did say it can be a pain in the a#% above, it is also a great investment. You can take advantage of the capital gains tax if you live in the home for at least 2 years prior to selling. Then you can roll the excess money into your next home!
If I can do anything to help or assist in your home search please fill out the form below or give me a call/text 920-252-2864