Once again we return to the topic of renovation and restoration of real estate. Remembering strategies BRRRR and flipping, calculating the possible ARV and analyzing the scope tried, we forgot about the most important thing - the object itself. To make it easy for even beginners to navigate the real estate market, separate names were invented to designate specific objects. So, for the implementation of all the listed trends, the purchase of a fixer is best suited.
❝Fixer-Upper – real estate that needs modernization or repair work, so when bought, its value is lower than the market value, and when sold, it increases significantly due to the work done.❞
The advantages of buying a fixer are obvious:
✔️ saving money when buying - you really have a chance to get a real treasure for nothing;
✔️ the potential for a significant increase in capital after the sale of the restored object;
✔️ the ability to personalize real estate to your needs and give it a unique appearance.
As always, there are risks involved:
❌ energy- and time-consuming - it will not be possible to realize the object right away, because repair work may be delayed. But this is to a certain extent only for your benefit, because, according to Ukrainian legislation, second sale and all subsequent ones require the payment of taxes in a slightly increased amount;
❌ unexpected expenses - in the course of repair work, new serious problems may emerge that you did not even suspect. If rotten floors lurk under the magnificent restored parquet, the amount of investments can double, and the amount of income will remain unchanged;
❌ financing difficulties - if you want to take out a loan for the purchase of a home, not every bank will agree to give it to an already too neglected object.
In order for the fixer to become a source of profit and not a headache, you should follow a few simple rules when choosing it:
- invite a specialist to make a thorough inspection of the object and inform you of all the defects that will have to be corrected at your own expense;
- calculate the cost of repair work, taking into account materials and payment to specialists. Add the received amount to the budget for the purchase to understand whether you are able to bring the matter to the end;
- research the real estate market to predict your future. Find out the value of similar objects and calculate your real income from the resale of the renovated property.
When buying a fixer, you can't do without fixing several fasteners, because such an object requires significant interventions by specialists. Investors peck at the low price, but don't let it overshadow everything else. The decision should be balanced, and the results of your actions should be profitable. Carefully analyze the scale of the necessary renovations, so that their cost is not greater than the future profit. Contact the experts, because they are able to give a professional assessment of the property and approximately calculate the amount of necessary investments.
Example of use:
- How is your fixer? Ready to count your profit?
- What kind of profit is there? I messed something up with that house. It turned out that all the wiring needs to be changed, so now I will not only not earn, but also go into debt.
- Here you are stuck. And I said that it was necessary to contact a real estate agency in order to buy a really profitable object. Eh, Voldka, you are a useless investor.
Ready to get down to serious work? Then you have a strong spatula and smooth plaster! But let's first pick up the real thing good option, on the repair of which you will not have to spend all the money in the world.
