Gauging The Financial Value Of A “Fixer-Upper” Investment.

No investment can be perfectly calculated to the penny, at least not one influenced by market directions, which will apply to almost every investment you make. While the property market is often considered the most stable field you can invest in, it’s true to say you can never perfectly predict it. You may spend years renovating a household only to find your local housing authority has approved a three-dozen housing developments nearby, limiting the value of real estate you had counted on. However, just as bad news can come, good news is also possible.

There are also means by which to make your investment even more sound thanks to exercising appropriate logic. For example, if a fixer-upper household is present on the market, odds are restoring the household and making good on its potential will see you gain a higher net return.

Yet this isn’t always a hard and fast rule. As such, it’ wise to gauge, the best you can with incomplete information about the future market, just how much of a worthwhile investment this could be. Let’s explore that, below:

Document Acquisition & Ease Of Sale

It’s not always the most exciting part of a property purchase, but getting a clear picture of how clean the paperwork is can help avoid some pretty heavy annoyances later on. You might find a house with obvious potential, but if the title’s in dispute or local authorities are chasing unresolved permissions, that’s the kind of baggage that can slow down everything, or even block a future sale. Not fun. Securing the deeds is a wise first priority.

It’s also worth checking if the property has had any recent valuation disputes or if there are delays tied to probate, as that can throw its own spanner into the works. Such legal hang-ups can drag on quietly in the background, and suspend any investment for years, so make sure you’re certain none of these issues will impact you.

Planning, Renovation & Development Restrictions

Some properties just aren’t meant to be changed in the way you’d like, and it’s not always obvious until you’re a few steps into the process. There could be heritage protections, or maybe the property falls under a protected area where even small changes need permission from seemingly draconian housing authority bureaucrats (they’re liable to have very justified reasoning, but it doesn’t feel that way when your investment has been affected). That doesn’t mean you can’t do anything with the place, but it does make the process slower, more expensive, and a bit more delicate to navigate. Know this before putting your eggs in one basket.

A Comprehensive Site Inspection

This part is often underestimated. Even when a home looks perfectly solid at a glance, older or neglected properties can hide all kinds of issues, especially if they’ve been in that state for a while. You could find damp behind walls, shifting foundations, outdated wiring, poorly insulated roofing, and more, which are issues that aren’t immediately visible but could end up eating into your budget fast. Money sinks or pits is what these homes are often called. It’s good to invest in an appropriate inspection ahead of time.

With this advice, we hope you can more easily gauge the financial value of a fixer-upper household to benefit as time goes on.