Fixer-Uppers: What To Fix by realestatetips4u

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Fixer-Uppers: What To Fix

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                               Fixer-Uppers: What To Fix

You've bought a house, a fixer-upper you can make some money on. What improvements and
repairs should you make? First of all, you need to know this before you buy, as I explained in
another article. Before and after you buy, though, you need to have some simple rules with
which to start analyzing possible fixes.

Return On Investment

A young couple was very disappointed when I told them there house was worth $110,000. "We
just put $40,000 into remodeling the kitchen!" they told me. I looked at the kitchen. It was nice.
They had added $10,000 in value to the house by spending $40,000. This is a classic example
of a bad return on investment.

With fixer-uppers, you have do things which give the most "bang for the buck." Aim for a three-
to-one return on improvements. If you're going to resurface the driveway for $1000, it better
raise the value of the home by $3,000. Even when you're just guessing, keep this three-to-one
formula in your head, if you want to invest safely.

How To Fix A Fixer-Upper

With things like new curtains, you can't really estimate the increase in value. What you can do,
though, is group together the many small repairs and improvements you are considering, and
imagine how the house will look when you are done. Then you can estimate whether you will
have increased the value enough to justify the cost.

It often is in the small details that you'll get the best return on investment, so look at these first.
A new mailbox, flowers on the porch, a raked yard and trimmed trees - $30 total if you do the
work yourself - can make a big difference in the first impression potential buyers have. First
impressions are important.

Other small investments that pay big include shiny new switch covers (less than $1 each),
shelves, a birdhouse, new doorknobs, new light fixtures, curtains, new rocks or wood chips on
outdoor paths, new faucets, new woodstain on decks, and general cleaning. Stand in front of
the house and imagine what it might look like with various small improvements (flowers, wood-
rail fence, birdbath, etc.).

The Big Fixes

Obviously, there are things that just have to be repaired. The basic systems must function.
Improvements, though, should be subject to the three-to-one rule. You may have to get
creative here. An investor friend of mine once had a wall put up, and for less than $1000
created a new bedroom, probably raising the value of the house by $8,000. Now that's a good
return on investment.

Bathrooms and kitchens are important. A $1000 updating of a bathroom can add $4000 in
value to a home. Spend $2000 wisely in the kitchen (New fridge, re-finish the cupboards, add


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                     Discover 101 Amazing Real Estate Tips and Secrets

a garbage disposal, etc.), and you can add $8000 to the sales price of the house. Look for
changes which are most universally valued (don't paint the kitchen pink because YOU like that
color), and be sure you get a decent return on investment.

Depending on the fixer-upper, there are many potential improvements that can be worth doing.
These include adding a carport, new doors, fences, gazebos, sheds, painting, carpet,
benches, a new closet, a new toilet, a new stove, a shower/tub surround, and trees or bushes.
The bottom line is the bottom line: be sure anything you do returns more than you spend,
preferably three times as much.




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