Fixing up an old or dilapidated home can be extremely tempting. Do it right, and you could be creating your ideal new home for a fraction of the price you’d expect to pay. There’s also a thrill to doing it yourself. Plus, flipping a fixer-upper can be a way to make a decent profit without a huge risk. But there is no short-cut to real estate dreams, and if you go into the project without proper planning and budgeting, it can go WAY wrong. It’s essential to avoid common fixer upper mistakes so your dream home project does not turn into a nightmare.
MISTAKE: Thinking you can do it all alone
This is one of the biggest fixer upper mistakes. Unless you’re a professional in construction, there will be some projects that will require the assistance of contractors. Even if you are a professional, the chances are that there’s something you’ll be better off outsourcing. (We always hire licensed electricians and plumbers for our home projects.)
Do you know the local codes and are you prepared to take responsibility for all the wiring in the house, a tough job even for a professional electrician? Are you confident you could handle all the roofing repair and have the house fully and safely protected from the elements? By all means you can do a lot of the work yourself, but identify the areas where outside help will be needed, and get the right tradespeople scheduled.
MISTAKE: Setting a low budget and sticking to it
The math of a fixer-upper is pretty simple. Buy a house at a low cost due to its need for repair. Renovate it for as low a price as you can. Then sell it on at the cost it would have fetched in pristine condition and enjoy the profit (or live in it and have it as an asset). The problem arises, though, when you become laser-focused on the budget at the expense of everything else. If you cut corners to stay under budget, then it will show, and the value of the house will suffer.
Setting a low budget for the reno isn’t what you should be doing; set a realistic budget and then be prepared to run over it by 20 percent because, sometimes, things don’t go to plan. Especially if you are working on an old house, there can be surprises beneath the finished floor and walls. Not planning for the unexpected is common among fixer upper mistakes.
Tip: Never do anything just because it’s cheaper that way, that’s asking for trouble.
MISTAKE: Ordering materials when you think you need them
Among fixer upper mistakes, this one can seem confusing at first. The materials for a renovation are among the most important costs, and you may think you’re playing a clever game by ordering them on an as-needed basis; if the tiling is scheduled in for week six, why would you need to buy the tiles on day one, right? But keep this in mind: when you order something “just in time,” you’re at the mercy of things going to plan, and that’s something you can’t control. Imagine the frustration of opening the boxes to start the tiling work, only to discover that they’re the wrong tiles, or there aren’t enough of them. Or ordering them just in time, but delivery is delayed by weeks.
If you order things as early as possible, you leave yourself room to react to any issues with delivery and timing. Not only that, but you block off that part of your budget and can proceed with everything else based on the best budgetary information available. It can be painful to pay out that much for something that won’t be used right away, but it works out for the best.
Tip: Plan where you will store all of the materials as they are delivered.
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