Living in apartments and making the landlord rich just isn’t the way to go. Escape they way we did by finding a fixer-up house and renovating it. Build equity, save money and resell for a profit.
Assuming you like to work with your hands and don’t mind spending time online or in the library and hardware shops, you can make this strategy work for you. Prepare yourself by researching and learning the skills you need: Painting, spackling and refinishing, basic plumbing and the rudiments of electrical wiring top the list. Watch PBS how-to programs and pick up videos at the library or hardware shop. Some of the larger stores like Lowes and Home Depot sponsor how-to classes.
Your most economical buy for a house would likely be a foreclosed property. Many real-estate agents deal with foreclosures, and some specialize in it. Check your phone books and online listings.Talk to several different agents and get a feel for their personality and experience. Are they energetic and enthusiastic as well as experienced? It pays to be selective. With a foreclosed property you submit a bid. With advice from your realtor, some research, legwork and luck you can often get a very good bargain. On regularly sold properties, bargains are also to be had if you shop around enough. I always advise people to ask around with their relatives and friends. Many are surprised to find that their older relatives will give them a very good deal if they promise to renovate the property.
Look at as many houses as you can. I used to find online listings for houses near my office and check them out on my lunch hour. This helped me to become better at spotting major flaws such as cracked foundations, sagging roofs, drainage problems, or just bad locations. Often I could eliminate one or two choices a day and save time spent with the realtor on weekends looking at the interiors.
When you visit a house with the realtor, be very observant, ask questions of the owners if present, and check everything inside and out, all around the property. Check the ceilings for water damage, walls for cracks or repairs, and all the appliances that go with the sale (stove, dishwasher, etc.) Check the heating and air conditioning by turning it on and off and changing the settings.Try the faucets and showers/baths and look under all the sinks for water damage.Try to take a look in the attic as well. (It helps to have a flashlight.) If you see something that might indicate a problem, always ask about it. Many owners will tell you straight-out about problems they’ve had and what they did to fix or repair it. Others may be close-mouthed or evasive- take that as a red flag. Check for signs of termite infestation and also check for mold and mildew.
The main thing to keep in mind is that you are looking for a place that is basically structurally sound, but has superficial flaws, like neglected paint, inadequate cleaning and care, minor plumbing problems, overgrown landscaping or other features that most people would find aversive, but that you can handle with a little sweat and elbow grease. You may also find a house in good condition; the owners just couldn’t make the payments, had to relocate, etc.
Note that, before you buy, have the house inspected by an experienced real estate inspector. Ask the realtor to recommend the best inspector they know. Read the inspection report carefully and consider all the details. For example, decide if you can handle replacing the water heater or HVAC unit if need be. We have found that many dealers in major appliances have very reasonable financing terms, so it’s usually not that much of a problem, especially of you get a great deal on the house. Many older houses will need work on the roofing. If the inspector finds a problem, it’s best to get a couple estimates on repairs and decide if it’s worth the expenditure. I have made several repairs, replacing shingles and patching leaks- but finding exactly where the roof is leaking is the hardest part. A couple times the roofing estimator pointed out the problem areas and I decided to fix the minor ones myself.
Once you are approved for a loan, sign a stack of paperwork and make the purchase, its time to get busy! We usually start with a thorough cleanup, dusting walls and ceiling, vacuuming and renting steam cleaners for the carpeting. Invest in some sanding equipment- orbital sanders and coarse, medium and fine paper. If you can find it, get the new light-weight spackling- it will save a lot of time and effort with better results. We usually invest in quality paint since we intend to eventually re-sell. Buy quality brushes and rollers- one good one will outlast three cheaper ones. Check for a Habitat for Humanity outlet in your area. They often have quality building and household materials and fixtures for bargain prices.
You may decide to tackle standard plumbing problems, replacing faucets, washers, cleaning out drains, etc. A couple times I have had to call in the pros, but I saved money by doing prep work (digging around buried fixtures, removing cabinets) and cleaning up or even assisting the plumber. I often will strike a bargain with a service professional if I think they are open to it. I try to avoid the hardbitten, angry types mainly by first talking to them on the phone, asking questions about their rates and availability. Most of the time you can tell by the tone of their voice and lack of courtesy that you should try another company.
Since I had experience in construction, I also will do a fair amount of replacement of electrical lines and placing new lines and outlets. MAKE SURE to locate the main disconnect and cut off ALL the electric power to the house before attempting this. It’s best in most cases to call an electrician if you don’t have any on-the-job experience with electricity. Never try to work on or replace the main breaker box with no previous experience. Whenever I do ANY electrical work, I have a licensed electrician inspect the finished work. I have been fortunate to to find electricians that will do this for a reduced fee, thus saving the money I would have spent if they did all the work themselves.
Renovating a house can be enjoyable work if you proceed with patience and perseverance. Remember, you are saving money and building equity (that is, money you pay off on the mortgage that will come back to you on re-sale), and you have a place to live in the meantime as well. I worked a full time job with our first house, so it was a fairly long-term project before we moved four years later. But the profit we made enabled us to upgrade to a new-built house in another town. Good luck on YOUR project- may your efforts and initiative result in success!