7 Questions to Ask Before Doing a Fixer-Upper

7 Questions to Ask Before Doing a Fixer-Upper. You can make a living from the home improvement business. Indeed, some HGTV gurus have made a solid living from buying, fixing, and selling homes.

Investors purchase fixer-uppers in the hope to save money in a home improvement and obtaining future earnings when reselling. However, you must consider some things to avoid that one of these projects end bleeding your pockets.

Below, you’ll see how to ensure the home you purchase for renovation is a real fixer-upper and not a lost cause.

7 questions you need to ask before you sign on the dotted line

  1. Are the home’s systems (roof, windows, electrical, etc.) in decent shape?

Some expensive home repairs are not visible during a basic walk-through. The roof is one of those elements that require professional inspection to determine its condition. Besides, it is one of the most expensive elements of a house. So, take a close look at it!

Check for the presence of issues such as:

  • Mold: Besides making your roof looking ugly, mold can destroy your roof’s underlayment and shingles.
  • Ice dams: Do you think those massive icicles in a house look beautiful? Be careful, it may have attic ventilation and insulation issues.
  • Rot: Roof rot is a sign of severe roof failures.
  • Structural and foundational damage: Does the rainwater not flow away from the house through the gutters and downspouts? Then, it may be filtering through the walls and foundation, or is going back into the roof structure.
  • Interior leaks: evident leaks are a clear sign of roof damage. These leaks are a good reason to negotiate the home purchase price down.
  1. How expensive will it be to make the home energy-efficient?

Usually, older homes are not as energy-efficient as new builds. However, you can improve the efficiency of a potential fixer-upper by implementing some upgrades.

For example, heat mirror windows will improve the efficiency of an older home. Besides, according to Maryalene LaPonsie of Clark.com, you can consider other relatively affordable fixes, such as:

  • replacing light bulbs and light switches,
  • replacing toilets, faucets, and showerheads,
  • insulating the attic and
  • installing a new furnace
  1. What kind of hidden hazards can I expect?

Decades ago, it was common to use certain construction materials such as asbestos and lead-based paint. However, they were discarded for being health hazards.

The federal and state government regulates the removal of lead paint. Moreover, there are severe penalties for contractors breaking these rules.

Other environmental hazards are wood rot, lead pipes, and mold. So, if you have any home improvement concern, consult your home inspector and any appropriate expert

  1. Are there signs of pesky pests?

Pests can damage everything in a house, from the structure to its ductwork and insulation. So, abandoned houses are the perfect place for insects and critters.

For example, squirrels chew through insulation, electrical work, PVC piping, and more to make their nests.

Among the worst are termites, powder post beetles, carpenter ants, rats or mice, fire ants, cockroaches, and bed bugs. Besides spread diseases, they cause billions of losses in property damage every year.

A home inspector should help to report any significant pests-related damage.

  1. Are there local laws or codes that will affect my project?

It is important to know whether you will need a building permit if you plan to perform any home improvement.

Allison Nash of Nolo.com wrote:

“Building permits are required … to ensure the safety of the work and its compliance with building, construction, and zoning codes.”

To know if you need a building permit, you should research local rules and regulations. Also, it is useful to consult neighbors living in similar homes in the area you’re considering.

  1. Can I afford this home improvement project?

To respond to this question, you can take into account the recommendations of Mike LaCava of BiggerPockets.com. He proposes to use a formula that he calls “the all-important ARV,” or after-repair value:

  • The sale price of other homes in the neighborhood during the last three or six months
  • If you can’t find a “comp,” take other homes locally with similar square footage as a reference
  • Compare the amenities in those homes to the home you are trying to flip.
  • Adjust the price upward or downward based upon bedroom and bathroom numbers

On the other hand, your costs will include:

  • Rehab work, financing, and time
  • Your investment
  • Spends for property taxes, utilities and insurance, and realtor-related fees

According to Mark Ferguson at InvestFourMore.com, an investor should beat the called 70 percent rule:

“An investor should pay 70 percent of the ARV of a property minus the repairs needed,”

If you, do it, you’ll be OK.

  1. Do I have the stomach for this?

It is not easy buying a home to perform renovations on it.

But, a home improvement pro will help you prioritize the required improvements. For example, a roof improvement or a window replacement should be on top of the list.

Hence, by getting a plan, a budget, and a reputable contractor, you will have peace of mind.

Let’s work on your home improvement project together.

Contact Mississippi Landsource or our partner Doug Rushing Realty visit us online to request an estimate.

Ask us about our industry-leading 50-year roofing warranty. We’re happy to help make your fixer-upper the home of your dreams.