Quote:
Originally posted by Lebenz
Buyer beware is imperative.
almost 2 years ago I almost bought a place that needed a lot of work – roof, insulation between the roof and living space, carpets, heater, new kitchen, new bathroom, new floors, new fireplace, insulation under the floor, new water heater, fixes to the decking, siding, and painting. The wires were okay, to my surprise, but made of aluminum….The house was 25 years old and had 0 maintenance since new.
I went to Home Despot, added the numbers and found that the cost of renovation was staggering. I don’t have my notes, but it was around $30 to $50K for all the stuff, not counting potentially years of labor to do the work. Worse yet, you couldn’t amortize the cost of the fix up – it was all outta pocket. After that, I added the cost of the fix up to a house I was looking for.......and ended up buying a bigger 4 year old house instead. Not only do I have 0 fix-up issues (okay, it’s a house there are always minor ones) but the total cost was less than the purchase price plus the fix up price. Better yet, the future value of the house i bought is greater than the fix-up...even after the fix-ups!.
A house is almost the same story as a car, just more expensive. You get what you pay for. BTW, Utah homes all but demand latest generation insulation, heating and air conditioning, unless you want to pay substantially to heat and cool the ever extreme temperatures.
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Lebenz, dilapidated houses can be a deal if the price is right, and you are willing to do much of the work yourself. My place is much like you described above, it literally needed everything, and there still remains a few expensive projects to complete. The caveat is to always do the homework to make sure that the place is indeed going to pay you back when it's done. The benefit is that you own a house that is exactly as you want it to look
The house I'm living in now, the previous owner ran a no kill animal shelter out of it. She literally let the dogs take over half of the house. The smell in this place was enough to scare off anybody, let alone the repair list. I do remember not having that euphoric feeling of having something new when I finished signing off on the paperwork for this place, unlike my first house that I had already been living in as a rentor for nine months.
Back to this place, I took over what was a $51K loan. I have spent around $30K on the place to get it to where it is now. I've replaced drywall, wall insulation, house wrap, siding, entire kitchen, all new floors, all new baseboards, new exterior doors, some new interior doors, new hot water heater, new HVAC system, put up vinyl siding (yes I mentioned siding twice), as well as the requisite painting and supplies.
I've since started the process of refinancing my house. The appraisal came back at $118,500. This is with the place still needing a roof, windows, gutters and downspouts, as well as all new attic insulation, and finally major exterior landscaping. I've owned the place three years.