Should you buy a fully finished home or put money into a fixer-upper? This is a big question for people buying property in BC.
The right renos can boost a home’s value significantly, but there are risks too. Renovations are expensive and unforeseen setbacks can cost you big. That said, even if it doesn’t seem like you are saving much buying a fixer-upper (especially with recent Nanaimo real estate prices) it can still be tempting to leave your mark.
Want to make the right choice when buying a fixer upper in BC? Here is our guide to choosing the right option, and knowing how to spot the right property in your local real estate listings.
Advantages of Fixer Upper Homes
The main reason that buyers are interested in fixer uppers is lower cost. Buyers will weigh the savings they make against the approximate spend of all the renovations that need to be completed.
Buyers are also concerned with the value they can add to the home, especially when viewing it as an investment property. This can be a tough calculation to make on the spot, so it is best to be conservative when crunching the numbers.
As well, many buyers also assume they can save money with “do-it-yourself” fixes for all but the most major renovations.
Drawbacks of Fixer Upper Homes
Renovating a new home is exciting. It’s an opportunity to put your vision into action and learn some DIY skills along the way.
But, anyone who has purchased a fixer upper before knows that renovating can also mean ballooning budgets and blown timelines. This can eat up time and money, and you will need to consider these costs when you decide whether to buy the home.
Recent price hikes for building materials have been a lesson for home renovators. Disruptions in the supply chain should be expected at some point during your home renovation journey.
When prices of lumber and other building materials rise, you may be put in a tough position: wait in your unfinished home until prices eventually settle, or “bite the bullet” and get your renos done on time for a higher cost.
As well, finding reputable contractors can be hard work. The best local teams will often be booked up for months in advance, and delays can be common.
It can also be hard to live in a home that is being renovated. Think of the last time you went without a kitchen or bathroom for a day, then imagine you will be spending months with at least something being worked on in your home.
If these factors aren’t enough to make you think twice, remember that renovations need to comply with your local building codes, and additional costs come in the form of building permits, disposal fees, architectural drawings, and much more.
In conclusion: a lot can go wrong when you buy a fixer upper. The only way to know what to expect is by experiencing it firsthand.
Finding the Right Fixer Upper
If you decide on buying a fixer upper, you will need to know what to look for when checking your local real estate listings. Here are a few things to keep in mind.
First, confirm whether the renovations you would make are cosmetic or structural. Cosmetic renovations are easier for you to do yourself, like drywall repair or floor finishing.
Structural renovations will likely require the help of a contractor. This includes anything to do with the plumbing, electrical, roof system, or foundation of the home. Many experienced renovators shy away from homes requiring any structural work due to the excessively high cost.
Next,consider the location of the home. If the neighbourhood is becoming more desirable, you could see a larger increase in the value of your home aside from the renovations you are doing.
Be realistic about your DIY skills. A willingness to be “handy” goes a long way, but you should ask the opinion of experienced friends and family so you don’t get in over your head.
Above all, take the time to complete a full home inspection before you put an offer in on a home. There’s nothing worse than starting off a renovation by finding out about some unexpected problems.
Ready to Get Renovating?
Fixing up older or underutilized homes is a passion project for some and also a way to earn a profit. Nanaimo real estate prices are strong, and many buyers are getting into the market by investing in fixer uppers.
Have you caught the reno bug? Learn about the best fixer upper homes on the market by getting in touch with the Jeff King Real Estate team. We know how to find great deals on homes with potential in some of Nanaimo’s up-and-coming neighbourhoods–and we love working with people who don’t mind getting their hands dirty or cooking dinner on the back porch for a few weeks.