Have you been thinking about buying a Muskoka home to fix up and live in? There is a certain romance to the thought of taking on a home that needs a lot of work and making it yours with your own blood, sweat and tears. Maybe you’re on the other side and thoughts of Tom Hanks and Shelly Long throwing their money into a “money pit” have you saying “No way, not for me!”.
A traditional fixer-upper is a property that will require significant renovations, reconstruction or redesign to be habitable or saleable at market value. They typically list and sell below the market value of homes of equal size and vintage in similar neighbourhoods.
So, you need to ask yourself if a fixer-upper is a bargain brimming with potential OR should it be avoided like the plague? The answer to this perplexing question will depend on several factors, including you!
One of the best reasons to buy a fixer-up home or cottage is for the location &/or lot. If you are determined to live in a particular part of Muskoka it may mean you have to “snap up” what is available and then fix up the home or cottage to suit your needs. If the size and structure of the property are right for you, it likely makes more sense to renovate as opposed to a complete demolition and rebuild which can be more time-consuming and in most cases more expensive.
Renovating a fixer-upper is expensive, and you can’t often finance a renovation. Typically it is not a project for a first-time buyer as usually all available funds are directed to the actual purchase. Remember that a fixer-upper is a large project, not the usual renovation projects most of us plan to do over time after we move into new home. So, to tackle a fixer-upper you need to have some capital tucked away to fund the project. Typically, it is a second or third-time home buyer who has a little DIY experience who takes on a fixer-upper home.
A buyer for a fixer-upper is sometimes someone looking for their “forever home” or they may be an investor seeking poorly-maintained properties to fix and flip. In both cases they have usually had several home purchase experiences under their belts and can rely on this to help them through tackling a large project like this.
As a buyer you need to consider your time, money and knowledge when taking on a fixer-upper. Will the time and money involved in fixing up a home or cottage be worth it in the end? If your full-time job is contracting, will the time spent on your own project be as valuable in the end as working on paid contracts?
Be prepared for surprises. Buyers for this type of property often don’t spend money on a Home Inspection. Without a thorough inspection of the property you could miss costly remediation issues like mold, asbestos, or faulty foundations.
Also be sure to include time for due diligence to explore municipal regulations, zoning and permitting. And, allow adequate time to carefully cost out the renovation – small things add up. Doing so could save a lot of heart ache or even financial loss.
A final consideration is whether you will need to hire a project manager or do it alone. Will you hire a contractor for the entire project, or manage contractors and trades for the different jobs yourself? Hiring trades for everything can be a challenge to coordinate if you’ve never done it before especially if you don’t know the local trades people. And remember, the good ones are often booked several months out.
As a local Realtor with many years of experience I am happy to help you find a perfect project home or cottage. And, if you have your heart set on a “fixer- upper” with my contacts in the region I may be able to suggest trades people you will need to be successful in your venture.