If you've ever drooled over a spiffy little Victorian or fabulous Cape Cod home but didn't have the funds to buy an already restored property, then you may be thinking about picking up a fixer upper. Fixer uppers seem to evoke two main responses in potential buyers, that of total optimism or that of complete terror. However, if you proceed cautiously and keep yourself firmly in the realm of realistic expectations then you can actually come through the experience relatively unscathed with a fabulous house to live in.
Many of the eternal optimists go into the whole adventure only thinking about the pros of the situation. "Houses that need work are cheaper, and I can make a lot of money fixing up a cheap house and then reselling it because upgrades will make the house worth more". Pessimists look at the whole experience as a large hole in the ground that you throw money into while you live years in a house full of drywall dust. Interestingly enough, both of these perspectives can be right but you can get the best of the situation if you go into the project logically and rationally.
Homes that need work do cost less, but they cost less for good reason. Sometimes they're not reduced as much as they should be, considering how much work they require. Don't buy any fixer upper without having a thorough inspection done so that you know exactly where you stand. Be aware that some problems may not come to light until after you start fixing things up.
Before buying a 'diamond in the rough' consider the neighbourhood. If the neighbourhood is unlikely to appreciate to a level where you could get a good price for your home, then it may not be worthwhile to fix up a house there. The age old adage of "location, location, location" certainly applies here.
While it is true that upgrades and repairs certainly make your house more liveable, some of them do not make it worth more. Kitchen renovations and additional bathrooms are generally sure fire ways to add value; ask your agent what sort of things buyers are looking for if you need ideas of what will sell. Be sure also to look into government grants for energy efficient upgrades that can be made.
Take care to get recommendations for contractors if you need to use one. Sometimes contractors can prove to be unreliable or less than spectacular; a pricy contractor can prove to be cheaper in the long run if they do the job right the first time. Get your contractor estimates before you buy and be sure to take them into account in your offer.
Be prepared to work on one area of your home at a time if you're going to live in it while it's renovated. Some homes require renovations that take a long time. As well, some neighbourhoods take a long time to appreciate to the point where you can make a profit on the sale of a renovated house.
All in all, fixing up a character home can be a really rewarding project. It can be very satisfying to live in a home that you've fixed up to be just the way you like it. Take care to go into the entire process with open eyes and a good plan to make the project go as smoothly as possible.
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