Are you finding it next to impossible to find a dream home that you can afford? Or do you want a good deal on your next home? Or maybe DIY home improvements are your hobby and you’re looking for a new project? There are a lot of reasons that you might decide your next home purchase should be a handyman special. But take some time to be sure you know what you are getting into before plopping down a large down payment on a project that might be over your skill level or one that won’t earn you a decent return on your investment.
First and foremost, start with the most basic rule of real estate… location, location, location. Owning and improving the lowest cost home in a desirable neighborhood will appreciate in value much more than the nicest and priciest home in the same neighborhood. As you would imagine, that lowest cost home is often the handyman special. Buy low, add a little elbow grease, and you can expect to reap big benefits (your dream home or for resale). The ‘average buyer’ is looking to purchase a turnkey home. These people expect to buy a home built in the 1980s that now has a fully remodeled/modern kitchen and a master bedroom with a 3rd bath addition. They’ll pay dearly for that turnkey home so they don’t have to do the work themselves.
The handy man special is the house that has been lived in and shows some wear-n-tear. There are many reasons the seller hasn’t fixed it up. Not enough available cash, an inherited house they don’t want to hassle with, the need for a fast or unexpected sale, etc. The handyman special typically falls between the turnkey home and the almost uninhabitable home that professional rehabbers expect to spend tens of thousands of dollars converting into a turnkey home for a big profit. More suitable to the handyman are houses in the middle needing:
Before buying a home, always have it professionally inspected. When buying a house in need of major repairs or upgrades is a time to for the most thorough inspection. Make sure the inspector has all of the right certifications and expertise. This may be a good time to ask the seller to provide a roof certification or other engineering reports that go beyond the standard house inspection. Even then, you may be in for some surprises once you begin major projects.
Your skill level or budget for contractors is critically important to the difficulty of home repairs and improvements that you take on. Beginning with some simpler tasks builds your skills and acquires basic tools that you need to move on to more challenging projects. You are always going to need a home to live in, which makes these valuable lifelong skills to have. You’ll be able to save tens of thousands of dollars making your own more complicated repairs and essentially develop the skills and experience to become a rehab investor if this appeals to you. After tackling the simpler jobs, you can move on to more complex and costly projects:
Besides location, the perfect handyman special is a home that most people want but few can see the potential beyond the imperfections. In today’s market, faded and peeling paint or worn out carpeting can make the difference between a dream home being caught up in a bidding war or sitting on the market for months without a single offer. This is truly the time you make money when you buy rather than when you sell.
Please leave your comments about your handyman experiences or observations.
Author bio: Brian Kline has been investing in real estate for more than 35 years and writing about real estate investing for 10 years. He also draws upon 30 plus years of business experience including 12 years as a manager at Boeing Aircraft Company. Brian currently lives at Lake Cushman, Washington. A vacation destination, a few short miles from a national forest. With the Pacific Ocean a couple of miles in the opposite direction.