Is A Fixer-Upper Worth It

March 15, 2014 | Author: | Posted in Insurance

Buying a home can be overwhelming. There is a lot to keep in mind, especially since this is considered the single most important purchase in the lives of most people. Is a big yard something that is important to you? Do you require a good school close by? The options can seem endless, but one decision you will ultimately have to make is whether you want to buy an older or newer home.

There are positives and negatives for both older and newer homes. A new home has got clean carpet, fresh paint, its move-in ready and has that new house smell. One big negative of a new home is that the price is often quite high.

As for fixer-uppers, they are generally old. The home has probably gone though many owners, and has been used for many years. Homes like this usually come along with some remodelling or repairs, but they have the advantage of having unique characteristics.

They could have kitchen cabinets that are from the 1960s, and shag carpeting which is no longer in style. A good way to think about it is that you have an opportunity to style the home according to your own taste. The price of a fixer-upper is typically lower than newer homes, and the square footage is usually higher. Keep in mind that these homes will require you to put in significant labor – don’t underestimate what it will take to complete.

If you are looking at buying a fixer-upper, consider the following steps:

Do your research to determine the difference between an easy and difficult fix. Changing the carpet or paint color doesn’t take a huge amount of effort and won’t break the bank. Completely redoing the plumbing or reinforcing the foundation can be a pain and cost thousands of dollars.

For you to invest your money in a house, protect your investment by making sure the home’s structure is in good shape. Steer clear of houses with structural damage, water damage, pests, and outdated wiring or plumbing. Issues like this can be very expensive to fix.

As you tour homes, make note of the items that need to be fixed, and don’t forget about insurance costs. When you purchase a home, your lender will require you to buy homeowners insurance.

Usually, older homes cost more to insure than newer ones. Home insurance carriers pay special attention to the age of the roof, electrical and plumbing fixtures, and heating and air conditioning systems. For good reason:

The odds of structural weakness and leaks go up as the age of the roof increases. Older plumbing is subject to leaks that can lead to long-term water damage. Older electrical systems that use ungrounded power outlets and fuse boxes especially carry a significant fire hazard.

If the home you are thinking about purchasing has some of these problematic issues, talk to your home insurance provider so you can estimate what it will cost to insure. Keep in mind that the renovations that you do, and your overall home budget needs to be considered which include your insurance premiums. Another thing to consider: Once you renovate the home, the risk will be lower but the replacement value will be higher. Don’t forget to talk to your insurance agent about the renovations you’re planning in order to maintain the level of insurance that you require.

If you think you’ve found the perfect house, don’t rush into it and never put in an offer on an older house without out making it conditional on a home inspection. The home may look perfect to you, but the home inspector will be able to identify hard to see problems so that you don’t find out after you move in that there are termites that have damaged the home’s structural integrity.

We offer the only Richmond Hills Home Insurance policy that can be truly tailored to your needs. Get a quote and buy a policy online or by phone. Or check out our Home Insurance video.


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