Buying a 'Fixer-Upper' for Your First Home

Wikipedia definition: A fixer-upper is a real-estate slang word for a property that will require maintenance work (redecoration, reconstruction or redesign) though it usually can be lived in as it is.

 Buying a fixer-upper for your first home can be a great way to get into the real estate market at a good price. But fixer-upper homes come with flaws and some can be huge. It's essential that you completely understand what you'll need to spend to make it livable, who will do the repairs, and how much patience you have for this project. Please be aware that it will take longer than you think it will - many times a lot longer!

The first thing to carefully consider is where the home is and the price range for homes in that area. The last thing you want to do is over-improve a home to the point where it becomes the most expensive home in the neighborhood because you will have a very difficult time trying to sell it, should you choose to. The ideal situation is to find a home in a good location that will be competitive in value once you've spent all the money to fix it up.

Most people who consider buying a fixer-upper tend to underestimate the cost of rehabbing. You need to make a comprehensive list of what it will take to get the home into the shape you want it in. Everything you do and every nail, nut or screw you buy costs money. A good practice would be to make your list, add 15% and then decide whether it's a good idea to buy a fixer-upper or not.

Make sure to get a home inspection to ensure you understand the basic repairs and maintenance needs. If there are problems with the home, consult with experts to give you an idea about how much the repairs will likely cost.

If a home is very old, it can certainly have some charm but it can also have a lot of nightmare issues that aren't easy to spot and these are usually big things like plumbing or electric wiring issues, and structural or foundation problems.