Let’s Get Real About Flipping Homes and Fixer-Uppers
Who doesn’t love a good HGTV house flip? While we’d be happy to binge hours of Fixer Upper or The Property Bros, it’s important to realize there’s a lot that goes into house flipping. We all love picking out the bathroom tile and rearranging a kitchen layout—but there are a lot of fixer-upper secrets that may surprise you.
Luckily, Wendy and I have gotten our hands dirty with one or two home flips, and we’re ready to shine a light on the pros and cons of fixer-uppers.
So, here’s a realistic take on what to expect when buying a fixer-upper. (Read to the end for some personal renovation tips!)
Setting Expectations
Perhaps the greatest perk of an older home is the lower listing price. However, this typically comes hand-in-hand with a laundry list of repairs that need to be made. Some home updates are much more costly than others, so it’s important to know what expenditures to expect when you go under contract.
Take a look at some of the most expensive home repairs that might pop up:
Foundation Repair | $5,000-$50,000
Roof Replacement | $5,000-$45,000
HVAC System | $5,000-$15,000
Electrical Rewiring | $5,000-$15,000
Window Replacement | $500-$1,000 (per window)
Plumbing Repairs | $3,000-$16,000
(Data from Forbes.com)
When a Home Has “Good Bones”
What does it mean when inspectors say a house has “good bones”? This typically refers to the overall construction and structure of the home. There’s nothing worse than faulty plumbing or cheap materials that are bound to deteriorate over time. The durability of a home is important for surprise factors that a homeowner might not expect, such as natural disasters or other weather concerns.
It’s all about timing.
Many fixer-upper projects are dependent on the owner’s preferred timeline. It’s best to tackle large projects one chunk at a time if you plan on living in the home while renovating the space. However, if you’re planning to “flip” a home—buying and updating a property with the sole intention of selling it at a higher price—then you might focus on projects that will yield a higher return on investment.
Here's a breakdown of the top reno projects for the best ROI:
Minor Bathroom Remodel | Returns an average of 102%
Landscaping | Returns an average of 100%
Minor Kitchen Remodel | Returns an average of 98.5%
Major Kitchen Remodel | Returns an average of 91%
Entry Door Replacement | Returns an average of 90.7%
Deck/Patio/Porch Addition | Returns an average of 90.3%
Basement Remodel | Returns an average of 90.1%
(Data from fortunebuilders.com)
Older Homes Have Character
We don’t want to scare you when it comes to fixing up older homes. Compared to the cookie-cutter new build communities, older homes have natural charm and character that can contribute to a unique living experience.
So, here are a few fixer-upper positives to inspire you during your renovation journey—as well as some flipping negatives to learn from:
PRO: Older houses are typically located in well-established neighborhoods with mature trees and a sense of community.
CON: Old homes can harbor toxins. Materials such as lead and asbestos are common in old homes and can be a health hazard if they aren’t dealt with properly.
PRO: When renovating, you have the chance to customize your home to suit your specific needs and style preferences.
CON: Renovations could take more time. Since old homes aren’t generally cookie-cutter, unexpected surprises are often found during renovations.
PRO: Older homes often boast unique architectural details, craftsmanship, and character that can’t be replicated in new construction.
CON: Older homes are more likely to have moisture problems, due to unidentified leaks and flooding or water damage that was never fixed properly. As a result, mold or mildew may be present.
Your Home Group’s Renovation Recipe!
Let’s be honest, this isn’t our first rodeo when it comes to home renovations. We recently flipped a condo in Rockland Hills, and we had some major success by replacing old flooring and planning a kitchen revamp.
But if we could distill all our advice into six simple tips, this is what we recommend:
Tip #1 - Make certain you have a good team of contractors to give you solid quotes for labor and materials.
Tip #2 - Plan for your profit in the purchase. Make certain to pad for contingencies—a minimum of 10% of the total project cost.
Tip #3 - Select and purchase your materials early in the project. Things like tile, plumbing, and fixtures for showers and tubs (don't forget the valve for the shower - it's behind the wall and you always need that first.)
Tip #4 – Keep your finish materials at the project so that your contractor doesn't have to chase you down.
Tip #5 – Planning to remodel multiple rooms but worry about a cohesive design? Solution: hire a designer or decorator. It makes a world of difference in the finished product, so make sure to plan for it in the budget.
Tip #6 – Stage it for sale. Staging the property is the best way to show off all the work you did on the property.
Can you tell we have a *minor* obsession with fixer-uppers? There’s something so satisfying about giving an old home some TLC. If you have any questions about the process, need a contractor recommendation, or want to start house-hunting for the perfect vintage home—call or text us today! We’re always here for your Baltimore real estate needs.
Best of luck with your fixer-upper!
