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WHAT IS A FIXER UPPER?
The
first question is what exactly is a fixer-upper? A fixer-upper is
a house that has been poorly maintained and has a lower market
value than other houses in the immediate area. The second question
is where are these houses? You can find distressed properties or
fixer-uppers in most communities, even healthier neighborhoods.
Deciding
whether a fixer upper is a wise investment takes some work. You
need to figure what the average house in a given area sells for,
as well as what the most desirable houses in that area are like
and what they cost. This is where a real estate agent will be of
great service to you.
If you take
this route you should try to find a "cosmetic fixer"
that can be completely refurbished with paint, wallpaper, new
floor and window coverings, landscaping and new appliances. You
should avoid run-down houses that need major structural repairs. A
house price that looks too good to be true probably is. A smart
buyer will find out why before buying it.
The smart move
is to find the least desirable house in the most desirable
neighborhood, and then decide if the expenses needed to bring the
value of that property up to its full potential market value are
within your budget.
Most recently,
the highest remodeling paybacks have come from updating kitchens
and baths, home-office additions and extra amenities in older
homes. While home offices are a relatively new remodeling trend,
for example, you could expect to recoup 58 percent of the cost of
adding a home office, according to the survey.
Also keep in
mind that if you are buying a house that has been significantly
remodeled; ask for proof of the permits involved before you
purchase to avoid future liability for fines.
If you are
interested in investing in this type of property put your
realtor
to work. Use his or her expertise in locating the area, locating
the house and doing a
market evaluation.
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