You have probably heard the term “money pit” in reference to a piece of real estate. It is when there are so many repairs needed to the house that it will never be worth what you have paid for it in the end. It is every home buyer’s worst nightmare but before you put away the real estate listing in fear of getting of buying a money pit, there are plenty of thing that you can do to avoid it. Avoiding a money pit is easy with the following tips.
Have a Qualified Home Inspection
It doesn’t matter if you’re buying your house from your favorite aunt, your best friend or someone that you trust implicitly you always need a home inspection. Most people aren’t remotely qualified to determine the overall condition of the home. While it may look great from the outside you can still have extensive termite damage, roofing problems, cracked foundations and a whole host of other issues that plague a piece of real estate. You need to know in advance what is wrong with the home and what it will cost you to fix it. Knowing what the necessary repairs are also puts you in a better position to negotiate the price.
Learn the Difference Between Minor Repairs and Major Repairs
Almost every house you will look at will need some type of work, anything from fixing a leaky faucet to replacing the plumbing. Minor repairs can usually wait, whereas major repairs cannot. It will give you a better idea of the total cost of owning this home and whether you can afford to buy it.
Cosmetic or Necessary Repairs
No matter what house you look at there will be something that you want to change, from the paint color to the countertops. Quickly identify your deal breakers and what you can easily change. Don’t like the paint color in the bedroom, that’s an easy fix you can do on a weekend for less than $100. Hate the lime green cabinets in the kitchen, which might be a deal breaker since ripping out the kitchen, can get expensive.
Overestimate Your Costs
Whether you are doing necessary repairs or cosmetic changes to the property always err on the side of caution and overestimate your costs. Inevitably it will cost more than you think or you will find something else that needs fixing. For the first year or two in your new home you will probably end up spending a great deal of time and money turning it into the space you want. You need to know that going in so you don’t find yourself house poor.