Though many homebuyers do not have the time or expertise
to renovate a fixer-upper, others find that such a
project offers a great opportunity to turn a profit.
In order to be successful and
minimize risk, buyers need to be aware of neighborhood
home prices. In fact, they can actually lose money if
they spend too much when purchasing the home, as the
price must be low enough to allow the buyer to pay for
the upgrades that will turn the property into a
moneymaker.
Investing too much money into the
remodel would be a mistake, however, because the
property will not fetch more than the area's market
price even though it may be worth more. Buyers also
should avoid depending on appreciation to earn a profit,
especially since a booming market can quickly turn
around.
The most risk-free fixer-upper
project is one in which the buyer plans to live in the
home, giving him/herself enough time to finish the
renovations without having to sell quickly to make a
profit.
Regardless of the reasons for the
purchase, buyers should have all fixer-uppers inspected
by a qualified professional to guard against lost
profits due to a serious defect.
