Before You Buy That Fixer-Upper – Consider 7 Possible Budget Busters
It can be a great money-saving idea to rehab a house, adding sweat equity, and ending up with the fit and finish you like. However, before you sign the purchase contract, think about some of these things that have been known to surprise the buyer and bust their budgets.
-1- Insect Infestation
Many insects can be eradicated, and the problem is solved. Some insects like carpenter ants and termites can leave their mark on a home that is more than just cosmetic. These insects feed on the main component in most homes, the wood that supports and surrounds the structure. Depending on the extent of the infestation and how long it’s been going on, the damage may be repairable. In some cases, though, it can be so damaging to structural components that the home could be condemned, or the repairs would be a huge expense.
-2- Electrical Problems
Wiring in a home is for the most part hidden from casual view or in the walls. Inspection of a fixer upper home should involve a thorough look at the electrical system. Breaker boxes should not have loose wires, hot spots, burn damage, or any other signs of overheating or damage. Breakers that are turned off may justify a check of where the connected wires go and possibly a test of the circuit.
Removing some receptacles to see if there is evidence of overheating is a good idea as well. Burned or damaged wiring at the breaker or the receptacle end of a circuit can be an indicator of a problem. Buying a fixer upper should involve help from professionals in spotting things like electrical issues.
-3- Permits and Code Compliance
Going along with the previous item, the renovation of a home will almost always require building permits and inspections by permit personnel. If you’re required to bring an old electrical or plumbing system up to current codes, you could be in for extensive rewiring or plumbing replacement costs.
You can’t get a certificate of occupancy until you pass these code inspections, so you will have to pay what it costs to replace the electrical or plumbing items that aren’t up to current code.
-4- Defective or Failing Roofing
The first protective defense of your home’s interior is the roof. Walls and windows are also protective, but the roof takes the brunt of the punishment by the weather. Depending on location and climate, it can be rain or snow, and almost always wind is a factor in roof wear. Depending on the age of the roof and any warranty available, it can be a small repair or thousands of dollars for a roof replacement.
-5- Heating and Cooling System Problems
Central HVAC (Heating, Ventilation, and Cooling) systems are complicated these days due to electronic circuitry for safety and efficiency of operation. Most cooling system compressors have a lifespan of eight years or less, around the same life of a furnace. A compressor replacement can cost $1,000 to $2,000 depending on the system size. An entire system replacement can run between $4,000 and $10,000 depending on size, efficiency, and features.
-6- Foundation Damage
A careful examination of every visible portion of the home’s foundation is critical. Any cracks in the concrete along the outside edges could indicate foundation degradation or slippage. Cracks in the flooring inside, especially long cracks emanating from walls, can mean significant slab movement. While there are specialty equipment and repair procedures to shore up and stabilize a foundation, it can be quite expensive.
-7- Water Damage and Mold
Water damage from plumbing or structural leaks, even if repaired in the past, can leave problems for the buyer and add costs to your rehab. Mold is one byproduct of water damage that is also a health hazard. Mold remediation can be very expensive. Rotted wood from past water damage, if structural, can be a large expense to repair as well.
These aren’t necessarily reasons to avoid buying a fixer upper, as many happy homeowners have rehabbed homes and created wonderful and safe living spaces they love. Just consider this list as a set of warning signs to look for when you’re checking out that fixer upper.