How to Spot a Fixer-Upper vs. a Money Pit
The housing market’s high opt-in costs have caused millions of working Americans to purchase a fixer-upper. But if they’re not careful, they may find themselves knee-deep in debt without a house to show for it. Some fixer-uppers aren’t worth the trouble or could actually be money pits.
How to Tell the Difference Between a Fixer-Upper of Money Pit
A trusted realtor from primestreet.io can connect home buyers and sellers, which is essential when finding a low-cost home. They can also help you find a fixer-upper that isn’t a money pit.
Look for Structural Issues
Structural issues, such as foundation problems or a failing roof, can be extremely costly to fix. Sagging roofs, bowing walls, and large cracks are other signs of severe structural issues. If you notice any signs of structural damage, it may be best to move on to a different property.
Consider the Location
Location is an important factor when it comes to real estate, and a property in a desirable location is more likely to be a good investment. However, if a property is located in an area with a declining market or is surrounded by properties that are in disrepair, it may be a money pit.
Check for Hidden Problems
Look for hidden problems that aren’t immediately apparent, such as outdated electrical wiring or plumbing issues. Single fabric-covered wires on white insulator knobs, old fuse panels, and small breaker panels are rarely worth the money to fix unless you like the bones of the house.
Get a Home Inspection
A home inspection can help you identify potential issues with a property, which is incredibly important when you’re looking at budget-friendly homes. While there’s no guarantee you’ll catch every single issue, it can give you a better understanding of the property’s overall condition.
Check for Insect Damage
Treating a home for an active case of termites or another infestation is very expensive. Wood boring insects often cause major damage to internal walls and floors, which aren’t visible. But a cracked foundation, ceilings, floors, and walls could indicate the house isn’t worth the money.
House Looks Sunken
Have you ever seen those homes that always sit in a pool of rainwater? If you’re buying a home in a floodplain, stay away. You’ll have to deal with persistent flooding, which can be made worse if the home also has a cracked foundation. Leveling a house is often complicated and costly.
Old windows with wood sashes and/or single panes are a major cause of energy loss, which leads to sky-high utility costs. Replacing old windows isn’t cheap, either, as they have to be cut to fit custom dimensions. However, if this is the only problem, the home may be worth it.
Signs of Hazardous Materials
Houses built before 1970 are instant red flags. They often contain lead-based paint or asbestos, which is toxic and expensive to remove. Keep in mind that you’ll need a specialty hazardous waste inspector to find these materials and check for radon, another highly-toxic chemical.
The Price is “Too Good to be True”
If something is “too good to be true,” then it probably is. Be wary if the listing price seems like a steal based on what you know about the property. In a hungry housing market, it’s bizarre that a great low-cost property hasn’t been snatched up yet by flippers or investors.
Get a Second Opinion
If you’re unsure whether a property is a fixer-upper or a money pit, it may be a good idea to get a second opinion from a real estate professional or a contractor. They can provide valuable insight and help you make an informed decision or point you to a higher-quality fixer-upper.