Flipping A Fixer-Upper Into Your Dream Home: Is It Really A Good Deal?
If you have a good eye for a "diamond in the rough," and you want to look for homes for sale that are super-cheap because they need lots of work, you might be wondering if you can make a dream home out of a dump. Well, you can, but then the question becomes more of a financial one than an ability question. After you sink tons of money into a super-cheap fixer-upper, is it really a good deal? Let's take a closer look.
The Cost of Basic Repairs
The cost of the basic repairs just to restore the home to a livable condition should be the first question you ask. For example, if you can get a house for thirty-thousand, but it needs a new roof, new siding, a couple of new windows, a new front door and new front storm/screen door, and new flooring throughout the house, you may be looking at close to another hundred thousand just to make the house a safe place to live. When you think about it, you could get another house for a hundred-thirty-thousand with none of the work. It may not be everything you hope it would be, but in the long run, it would cost less.
Add on the Cost of Remodeling
Aside from the cost of basic repairs, you want to do a few upgrades and remodel the house into your dream house. Extending your home in any one direction costs around $50,000 to $100,00 per room, per floor. This does NOT include building the extra space over an extension of the foundation, which could easily add another $20,000 to $100,000, depending on the size of the foundation and whether you opt for a slab or an extension to the basement. Now your $30,000 fixer upper is hitting the upper two-hundred thousand price range (or more). At this point, you could have built the house from scratch for a little bit less.
How to Make This a Good Deal
Clearly, it is not such a good deal when you begin racking up repairs and remodeling to your super-cheap house, but there is a way around that. First, you have to buy your house at auction for less than $15,000. Some people get a crazy good deal from government auctions by buying property for a dollar to less than $100. If you can do that, you are already ahead. Next, find contractors who will donate their time to help. If you have friends who are contractors, this helps immensely. Finally, check out thrift stores that sell building supplies and tools for pennies on the dollar. You might just turn your forgotten flop into a dream house yet. Do some research on the homes for sale in the areas near you before making the plunge.