It can be hard to decide between buying a fixer upper or a move in ready home( or at least a home with very few repairs needed) in Huntsville. It’s certainly not exactly a “simple” decision. Following are FIVE things that are great to consider when making the choice.
1) Supplies, Labor and Time: Even if you do the work yourself versus hiring a professional, ask anyone and you’ll find renovations are notorious for costing more than you planned either way. If you can’t reside in the home while repairs are made, the additional cost of covering the mortgage, taxes and insurance while the home is vacant can also substantially add to the total cost.
2) Taxes and Insurance: Improvements often add to the cost of property taxes and insurance. Therefore, be certain to consider the long-term consequences. Properly performed repairs and renovations may help or hurt property tax values and homeowner insurance costs. It’s a good idea to get an estimate in advance. However, hiring outside crews to perform needed repairs can result in a tax write-off for investment properties.
3) Long-Term Profit Potential: It’s no surprise that repairs and renovations can make your home more valuable. However, this is typically only the case if the outside neighborhood is desirable. Whether investing for long-term appreciation or cash flow, carefully evaluate the desirability of the neighborhood. It makes a difference!
4) Financing: Properties in need of repair often have different rates and requirements from lenders. Find out in advance if you are eligible for special funding, grants or tax incentives. This is especially important when working with affordable housing options or first-time homebuyer programs.
5) Building Codes and Zoning: It is utterly important to understand local building codes and zoning regulations before purchasing a fixer-upper. You should absolutely never assume you can modify a structure without considering the building code. Likewise, zoning may dramatically alter the ability to use a property in a specific manner or make certain changes or additions