Choosing a Fixer-Upper

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[6] Know the market. Before you make a purchase, you ought to have a good idea of how much people will likely pay to rent or buy the house. Then subtract the purchase price and the probable repair costs from the potential market price, and the difference will, of course, represent your profit (or your loss).

HEDGING YOUR BET

If everything checks out in your favor, then you're ready to make an offer. On the other hand, few houses will be all you're looking for, so when you find one that you think you'd like to buy but that doesn't quite measure up in every respect, consider making an offer anyway . . . but with certain contingencies that will relieve you of any obligation should your dream house turn out to be a nightmare. For example, you might make your offer contingent upon the house's living up to current building codes. Then if—upon inspection—it proves to be not up to snuff, you'll have the option of backing out of the purchase . .. or, perhaps, of acquiring the property for a lower price.

Remember, though, that adding too many contingencies to a bid could leave you little room to bargain . . . so if your offer is contingent upon a number of factors, be prepared to pay nearly the full asking price.

If you do manage to find a house that still seems—after all your investigation—to be a good investment, roll up your sleeves and dig in! You'll have a lot of work ahead of you, but—because you did your homework in advance—it should be only a matter of time before you start reaping the rewards!

EDITOR'S NOTE: More information on avoiding pitfalls when buying a home—to rehab and sell or to live in—can be found in Les Scher's excellent book Finding and Buying Your Place in the Country. It's available in many bookstores and libraries or, for $9.95 plus 95¢ shipping and handling, from Mother's Bookshelf®, P.O. Box 70, Hendersonville, North Carolina 28791.

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