|
Market value is more relevant than the condition of a home. You are no more likely to find an undervalued "fixer upper" than an undervalued home in good condition.
How you buy can make the most difference. Particularly in areas that are not yet hot, foreclosure auctions can produce amazing bargains in both market-ready and fixer-upper properties. This is certainly the best route if you are going to hire a contractor to deal with renovations, because your costs will include his profit margin.
The people best positioned to take advantage of fixer-uppers are contractors themselves. They are not neglecting their usual source of income while they do the work (which can be a significant hidden cost of DIY renovations and renovations you manage yourself) and they will pay less for labor and materials.
In addition, there are three mistakes people commonly make. They fail to recognize:
1. The difference between renovations and improvements. If you bring your home up to the standard of those around it, even if you pay "retail" for work and materials, you should recoup 90%+ of your cost. But anything you do to a higher standard can mean losing 30% or more of your outlay.
2. That there is (usually) a maximum price that a district can stand, regardless of the condition and amenities that a property offers.
3. That bland is best when it comes to preparing a property for sale.
|