The Difference Between a Fixer-Upper and a Money Pit

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Some people find value in purchasing homes that are not in the best of shape, thanks to an often considerable price reduction on the home. If a home just needs some TLC, it’s worth it to some home buyers to simply fix the issues themselves for relatively less money than buying a more expensive brand new home. However, if you are looking for a bargain home, how do you know if you’re getting a fixer-upper or a building fit for condemnation?

According to TIME Money, there are three relative kinds of homes that could use some repair work:

Aesthetic fixer-upper – This is the typical kind of fixer-upper that people are attracted to because it’s still a good house, but provides the new owner an opportunity to customize the look of the house and even modern things like the kitchen and bathroom. If you buy a home based solely on it’s basic dimensions and potential, you will mostly likely be fine with buying a home that just needs a facelift. Things that are typically changed are:

  • New paint
  • New appliances
  • New flooring
  • New bathroom
  • New kitchen
  • New furnishings
  • New landscaping
  • Add or remove walls

 

Blood, sweat, and tears fixer-upper – This kind of home has definitely aged and been through a lot, so you may have to dig deeper to improve the quality of the home. There is most likely internal damage that needs to be taken care of, but the structural integrity of the home is still steadfast. You may be more inclined to buy this kind of home if you yourself are handy and know a thing or two about home improvement. If not, you may end up spending quite a bit of money on contractors and supplies. Things that are typically improved in addition to those things listed above are:

  • New insulation
  • New drywall
  • New ceilings and roofing
  • New piping
  • New internal wiring

 

Knock down, start from scratch fixer-upper – Unless you have the money and intent to build a totally new home, you do not want to buy this money pit. You could get an amazing deal on the home, but it will probably end up cost you much more just to make the home a decent place to live in. The home probably looks like a disaster struck it and was abandoned shortly afterwards due to the structural integrity being compromised by extreme degradation or mold infestation. Unfortunately the home must be rebuilt from the ground up if it’s this bad.

So how do you know if you’re getting that ugly duckling or complete disaster home? There are several ways to tell:

Get the full list facts on the house – Before purchasing the home, find out everything you can about the house itself, including when it was built, who may have owned it before the current owner, any existing structural and cosmetic damage, whether or not the current owner will fix anything before they leave, and how the home compares with your expectations.

Itemize changes you would like to make to the home – After finding out what issues the home has, make a list of the work needed in order of priority, starting with the most pressing. If the most immediate repairs needed are numerous, expensive, and have to do with the structural integrity of the house, you very well may have a money pit on your hands.

Depending on your budget and time you have to dedicate to any modifications and construction, you will want to choose a home that you make your own within your own means. People who can only afford a new coat of paint for the house should stick with homes that require little maintenance upfront, which means saving a bit more money for the slightly higher asking price; remember that fixer-uppers don’t just demand money, but also your time, effort, and attention when work crews are working in and out of your new home.