Let’s face it, many of us get sucked into those home improvement shows that make us dream of buying that cool old home and fixing it up ourselves. They make it look fun and easy, well, to an extent. But is that the right choice for you?
Before you get too excited and jump into a big project like that, sit down and weigh your options, write down the pros and cons. Remember that movie Money Pit? That could have easily been a true story.
First of all, renovating is very stressful. It is time consuming and if you don’t know what you’re doing you can cause more problems than you fix. Or if you have to hire someone, it can get very expensive, especially for unforeseen issues that arise. So here are some things to think about.
- Location - is the house in a good location where prices will increase and you’ll get the money back that you put into it?
- Does the house have good “bones?” Can it handle the renovations? If it doesn’t have a good foundation, a good structure, then it’s probably best to walk away.
- Can you do the renovations you want to? Is there room to do them? Would you have to tear down walls that are support walls? (Because you can’t tear those down!)
- Can you legally do those renovations? Don’t forget many cities have permits that you have to acquire and they have to approve the updates.
- How does the home compare to others in the area? Don’t overbuild or create a monster where you are the largest and most expensive in the neighborhood. You might not see a return.
- How long do you plan on living in the home? Extensive renovations might take a lot longer to see a return on.
- Do you have the patience and fortitude to live through a renovation? Again, remember the Money Pit? Make sure you are mentally, physically, and financially prepared.
- What will those renovations do to your taxes? Be prepared for a tax increase if you do some big ticket items and the county sees them.
The bottom line is, be informed, don’t make hasty decisions because you fall in love with one of those cool old houses. Be prepared, think about it, and then make a decision based on what is best for you as a home owner and investor, because a home is an investment.