Good Morning Dinks. Let me ask you a question; is your home exactly how you want it to be?
Not many of us can say that our house is perfect because I am sure that there is always something that you want to upgrade, remodel, or improve in your home.
I am redecorating my bedroom… again. I want to purchase a new kitchen table, I want to repaint my living room, and I would like to buy a second sofa. Of course I don’t need any of these upgrades in my home, but I want them. I absolutely love shopping for home decor, I don’t know why but I do. I can spend hours every weekend browsing through Pier 1 and Bed Bath & Beyond. I consider myself to be a very creative person, but when it comes to colour coordination I could definitely use a little help from Martha Stewart.
I am definitely not one of those people who could buy a house and fix it up, but I have a cousin who is currently on his second fixer-upper home. My cousin does not flip houses for a living; he has lived in both of his homes. My cousin loves buying houses cheap and then spending a year or two fixing them up and customizing them just the way he wants them to be. I know that there are several TV shows, such as Flip This House and Flipped Off on A&E, about how to buy a house cheap, fix it up, and sell it for a profit; but just like colour coordination, fixing up and flipping houses is just not my thing.
The Financial Post recently published an article titled “The Pros and Cons of Buying a Fixer-Upper”. Let me ask you another question Dinks, are any of you in the real estate business? I would love to know from real people in real life if the business of buying fixer-uppers and flipping houses is really a profitable business.
Here are some Pros and Cons of Buying a Fixer-Upper:
Pros:
– You can customize your home exactly as you want it. If visiting open house every Saturday and Sunday in order to find your perfect dream home seems exhausting to you then you may want to buy the next best thing and fix it up to your liking.
– You can afford a larger house. If you are willing to do some of the home repairs then you can purchase a bigger house that needs some work for the same price or even cheaper than your ready-to-move-in perfect dream home.
– You can buy the worst house in the best neighbourhood. The more work a house needs the cheaper you can buy it.
Cons:
– It’s very possible you will go over budget. On almost every single episode of every single flipping homes TV show that I watch the owners go over budget. This can be a major problem, especially if you don’t have any extra money.
– You may not be able to sell it if you want to flip the house. Just because you have a newly renovated home to sell doesn’t necessarily mean that someone is in the market to buy it. Monthly heating, lighting, and mortgage costs can quickly add up to be a major expense if your house sits on the market.
– Renting the house may not always be an option. If you can’t sell your newly renovated house right away you may want to rent it out. However, being a landlord brings on a whole other set of potential problems.
Photo by guttorm
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You may be interested to hear about the house we closed on Friday. It has all new mechanicals, roof, and siding. What it doesn’t have is updated interior, and therefore we have a lot of work to do.
We are starting by cleaning, painting and installing new blinds. Next up is replacing the outlets and installing GFCI as needed. Next is the actual light switches that need replacing. I could go on!
All this house really “needs” are small upgrades that if the seller had made would have pushed it outside of our budget. Thankfully we were able to get it and make the cosmetic fixes. There are lots of things we would love to do such as hardwood floors, updated bathroom and kitchen, etc. but nothing that we absolutely must do.
Finally, I think renting is a great option and as long as you pick a decent location you will always have renters. A bonus to this house is actually that it has a walk-out studio apartment in the basement. This will help with rent and funding future upgrades.
I would recommend a fixer-upper, but only if you have the time to put into it. We don’t have kids and don’t plan on having kids. We are pretty busy but at this point in our lives we are definitely willing to put in the time and build some “sweat equity” in our house.
I think it all depends on how handy you are and how much sweat equity your willing to put in the house. All fixes come with hard work. My parents bough two fixer upper homes. Let’s just say I spend my childhood pulling carpets, placing tile, painting, rearranging furniture, etc. My dad had a lot more work than I did of course. But, I feel like my parents gave up at the end. They still have an unfinished closed garage that they were going to turn into their master retreat. They have been planning to remodel it since 2007. Right now it’s packed with all storage stuff.
I have always thought about flipping homes. I have decent handy man skills, but I’ve always worried I would come across something I couldn’t fix. I would love to do it, and put extra cash in my pocket though.
The problem with the house flipping shows is that they only show the people who barely know how to swing a hammer and yet have somehow come up with a budget? They should really just call their “budget” for what it is, a wild guess. People sticking to a budget and doing a good job just doesn’t make very good TV.
I went the fixer upper route, and while it’s nice to be able to do everything exactly how you want, it’s a lot of work.
I know that flipping houses can be a great business if you like to do it, I just can’t committ to that.
@DC – I am not sure if you saw our Tweet but you won the Sexy and Smart Contest. Please send us an email with your address. Are you living in the home you are fixing up?
Kristina – I will shoot you an email, thanks for the reminder!
HAH! @DC, Congrats buddy!