Single-family homes that need some work are often put up for sale at an attractive price compared to their more modern and updated competitors. While it's appealing to look at a home's asking price and see it be much cheaper than what you'd pay if the home were fixed up, single-family homes that need work — also known as a fixer-upper — can be a lot of work for the investment.
Should you invest in a single-family home that needs work? There's no reason why you can't so long as you know what you're getting into. Before you make the decision about if this type of home is right for you, consider the following things.
Do you have the money for fixing up the property?
Even though you save money buying an investment home when seeking single-family homes for sale, you should still have the money to get the home fixed up. Since these homes are often not able to be moved into right away because they need new flooring, appliances, electrical work, and more, you want to make sure you have the funds to turn a fixer-upper into an attractive property you can live in.
Remember: what you invest in a single-family home that needs work is not just the cost of the home but the cost of the repairs needed. Make sure the restoration and purchase costs don't add up to be more than the home could ever be worth so you make the most out of your investment.
Do you have the time to make the home ready to live in?
Unless the home just needs some aesthetic work, you likely won't be able to move into your fixer-upper single-family home right away. Do you have the time to wait for the home to be fixed up and have temporary lodging while you wait? A major home renovation can take several months to a year to complete or longer, depending on what is needed to be done to make a home livable.
Make sure you do a full inspection of any single-family homes for sale in your area that need some work so you have a great idea of what you're getting into. Done right, you can invest in a single-family home at a great price. Speak with a real estate agent about single-family homes available in an area you like. Talk about whether or not you'd like a fixer-upper.