While construction and home renovations can be financed, most homeowners find they need more cash to cover the total cost of making their fixer-upper their dream home. The hope is that after all the blood, sweat and tears (and sawdust), they’ll have a home that is customized to their own standards and taste, even if it meant taking out more savings or another loan.
But renovating isn’t for everyone. Here are four questions to ask yourself as you consider whether you should buy a fixer-upper:
1. Do You Have the Connections?
Do you know architects, contractors, project managers and other people in the construction business? Can you find some that you trust? Hiring the right people can make all the difference. A project manager or general contractor can streamline the process and keep subcontractors on task and on a timeline. “It’s important to find the right people,” Mahal says. “Sourcing and materials are a bit of a challenge these days, so you need more of an expert than usual.”
2. Do You Have Another Place to Live?
While you’re renovating, you may not be able to live in your place. Some people can live through a kitchen renovation or other aspects of a gut-job, but you can’t live without a bathroom. When budgeting for a renovation, consider that while your new home is ankle-deep in plaster dust, you will likely need to live somewhere else, and generally that’s not free. Do you have the budget to carry two homes, or rent something economical while renovating? If a nearby friend or relative can put you up it may be an opportunity to save, but beware of the strains it might cause on the relationship.
Even if you’ve done it before, living through a renovation may be tougher than it used to be. “People are working from home more than ever and they can’t do their day jobs while workmen are turning their house into a construction site, banging away in the kitchen and bathrooms,” Strausbaugh says.
3. Do You Have the Vision?
Be honest. Some people are just better at envisioning a project and seeing it through. If that’s you, a renovation project can be a creative outlet and an exciting, fun project. There’s better chance for success as you communicate with contractors and potentially manage some of the project yourself. Otherwise, it can be an overwhelming stressor.
4. Do You Have the Bandwidth?
The commitment to renovating a house is not small: It’s not only hiring the right people, but also having the flexibility to visit the site on a regular basis, taking the time to shop for materials and appliances, and making new decisions when complications arise. Being even more flexible with your budget and timeline is crucial. That said, “being smart with your budget doesn’t mean you have to compromise, it means you have to get creative,” Mahal says.
If you’ve planned ahead, extended your timeline to account for potential delays, and left cushion in your budget, the finished project might be better and have more value than anything you could buy that was created by someone else. As any expert will tell you, it’s hard to put a price tag on the pride that comes from a successful home improvement project, especially a big one.
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