When you’re looking to invest in a fixer-upper, you may not know where to start. There are many different factors to consider to ensure you’re prepared for the process and the costs involved. Here are a few things to consider before you buy a fixer-upper.
How to Pay for the Renovation
Consider how you plan to pay for the refinance to ensure you stay within your budget and can afford the project. You can qualify for a conventional loan if you’re looking for a fixer-upper that is in good shape but only needs cosmetic work. If structural issues are present, a renovation loan is the best option.
Create a Budget
Creating a budget will allow you to know what you can afford to spend and where you want to put your money. Know how much you can afford to put aside after the down payment. You should also set aside 10 percent of your budget for unexpected surprises during the renovation process to avoid getting into debt. Your contractor can give you an idea of how much you’ll have to spend after discussing your plans.
Build Your Team
There are many different professionals you need to hire to work on your fixer-upper. The first professional to hire is the contractor. Avoid going with the person that has the cheapest rates, which can mean they don’t perform good work or use quality materials. This can also affect the quality of your home if they make mistakes with the structural work that is performed on the building.
Become Educated About Permits
There are many different permits you’ll need to obtain when transforming your fixer-upper. Whether you’re going to change the layout of the interior setting or the plumbing system, you will likely need additional permits to complete the work. A professional contractor can apply for the permits and keep you updated about the approval process.
Expect delays and surprises when you’re renovating a fixer-upper. Although it can often be stressful, you can have a smoother process if you set realistic goals and stick to your budget.
Knowing what goes into working on a fixer-upper can allow you to be more prepared. This will also allow you to make better decisions while working with a qualified contractor.