September 29, 2011

Fixer-upper or Ready to move in?

You’ve started your home search and are trying to decide if you should focus on a home that is perfect for your needs or one that is more of a fixer-upper that you can renovate. Which do you truly prefer? How do you decide if you are torn between both possibilities?

Consider the following pros and cons to figure out which type you should be targeting in your home search:

Am I a fixer-upper type?

My friend Anna started her home search with the idea that she would be willing to buy a home with a less than perfect kitchen, provided that it meant room in her budget for a renovation. That could be your reason for a fixer-upper or perhaps the idea of shaping something into your specific tastes is very appealing. Keep in mind however, that with renovations comes a lot of work as well as planning; what do I do if I don’t have a kitchen for 6 months?

Depending on the extent of the project, you may have to deal with constant noise, mess, unusable areas, plus a lot of hard work (think of all all of the decision-making and communication entailed in a project, with contractors and/or trades) not to mention unexpected costs that can arise when undergoing a reno.

However, perhaps by compromising with a less than perfect, move-in-ready home, it means that you were able to move into a neighborhood that has all of the amenities that suit your lifestyle. Plus, the home was more affordable because it needed some repairs. Also, keep in mind that if you choose high ratio investment to return projects, you’re increasing its value over time (just remember not to over-renovate for the neighbourhood).

Renovating may be a good opportunity to save on money in the long run. By improving on a home’s energy efficiency, you’ll save on utility bills. Some green improvements are eligible for government subsidies or rebates – saving you even more money.

If you do decide on a fixer-upper, be sure to get a home inspection by a recommended professional! You were going to do that anyways right? It’s a good idea to know exactly what you are buying before you make that commitment. You may think you just need to re-do the kitchen but an inspection may unearth new roofing needs or inefficient windows. It’s always a good idea to get a clear picture.

Tomorrow: Why you should forget about the fixer-upper and get a move-in ready or brand new home.