Choosing a Fixer-Upper

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[1] Price the cost of repairs before you purchase. In fact, it's best to call electricians, plumbers, carpenters, masons, and carpetlayers—getting rough estimates of typical jobs or the approximate price of work per square foot—before you even start shopping. (After all, if a dwelling is indeed a bargain, another buyer could snatch it out from under your nose while you waste time getting estimates after the fact.) Find out how much it costs to insulate an attic, for instance, or to replace rotted floors, or to rewire a house. Then, with the average figures in mind, you can add the potential cost of repairs to the price of any given house.

[2] Once you've found a home that you might want to purchase, examine its structural condition carefully. What kind of foundation does it have? Are there shingles missing, or do water stains on the walls and ceilings indicate a leaky roof? Require that a termite inspection be made, and ask the seller to pay for this and for any necessary repairs due to infestation.

[3] Make sure that all the building's utilities are serviceable. Is the plumbing functional? Is the wiring safe? Is the furnace efficient?

[4] Find out about zoning. Should the house you're looking at be in a commercial zone, you might be able to sell it as business property . . . and that switch in classification would likely raise its value. However, if you're looking at a lot with two houses on it and find the zoning to be R-1, you must realize that the site is zoned for one house, not two. Perhaps the law has changed since the previous owner acquired the property, but you—as the new owner—could be forced to obtain a zoning variance (permission to change the use of a piece of property for a certain length of time).

[5] Don't be put off by looks alone. A filthy house with unkempt grounds will tend to discourage buyers who see only appearances and not potential, so the price of such property is often low. A shrewd person who wants to make a profit, though, can easily see that by removing a few truckloads of trash and using some soap and water and elbow grease, he or she can make that eyesore very livable. The same principle holds true for homes with "facial" damage to existing paint, carpets, linoleum, wallpaper, and landscaping. Most cosmetic problems are easily and (as compared with the cost of structural damage) inexpensively repaired.

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