Reasons to Avoid Buying a Fixer-Upper House as an Investment Property
Buying a house as an investment property can be one of the smartest financial decisions that you make. There are several details to carefully go over when you're looking to buy this property, as it needs to be at the right price to be a sound investment. Some people buy houses that need work, fix them up, and then begin renting them out. This approach can be worthwhile, especially if you can do the work yourself, but this isn't the only way to go. You can also look for a house that needs little to no work. Here are some reasons to avoid buying a fixer-upper.
You Can Rent it Quicker
It's ideal to get a tenant into your investment property as quickly as possible. The longer that you go with the house sitting empty, the more money that is coming out of your pocket as you pay the mortgage without any rent coming in. When you buy a fixer-upper, you may need to take weeks or even months to get it ready for a tenant—and the whole time, you're spending more money on the property without making any. When you buy a home that is in good shape, you may be able to have a tenant moving in within a week or so.
You'll Be Less Attached to It
It can be easy to get attached to a property that you've fixed up yourself, even if you know that it's an investment. The so-called "sweat equity" that you've sunk into the residence can make it feel special, and this means that it can be difficult to see the house's condition worsen over time. For example, if you've painstakingly put a hardwood floor in, and then had a tenant with a large dog that scratched the floor, this can be a difficult situation to accept. You won't develop this same attachment with a house that you don't need to fix up.
You Can Spend More Than Expected
It can be difficult, especially for novices, to estimate exactly how much money they'll need to spend fixing up a house. This can mean that while you may be able to buy your fixer-upper for a good price, it's easy to notice that your remodeling expenses are quickly adding up. By the time that you're ready to get a tenant into the residence, it's possible that you'll have spent far more than you'd expected—which is a problem that you'd avoid entirely by buying a property that doesn't need work. Your real estate agent can help you find whatever investment property is right to buy for you.