The median price of homes in New Orleans is approximately $348,000. While that’s viable for some first-time homebuyers, others may need less expensive options. As a result, fixer-uppers may seem like a great alternative. Fixer-uppers do come with some benefits. They typically cost less, and you can update them to suit your needs and taste. However, there are also challenges you’ll encounter. If you’re considering a fixer-upper in New Orleans, here’s what you need to know.
Buying a Fixer-Upper May Mean a Different Kind of Mortgage
Buying a fixer-upper isn’t always an option with traditional financing. There may be livability rules, making some properties ineligible. Additionally, they won’t provide funds for updates and repairs. If you can fund the updates with cash and the property is considered habitable, traditional mortgages can still work. If that isn’t the case, you may need alternative forms of financing if you want a fixer-upper. Renovations loans – such as the HomeStyle Renovation, CHOICERenovation, VA Renovation, or FHA 203(k) loans – are the most common choice. However, it isn’t the only option. For example, you could couple a traditional mortgage with a personal loan to cover the cost. What’s important is determining which path meets all of your needs. That way, you can fund the purchase and repairs.
Finding the Right Fixer-Upper Can Be Tricky
When looking for a fixer-upper, it’s easy to assume that any property in need of work is an excellent choice. However, that isn’t always the case. Certain repairs are incredibly expensive and don’t offer solid ROIs. Roof replacements, foundation repairs, new electrical, and plumbing overhauls aren’t cheap. Additionally, they don’t typically increase a property value enough to cover the cost. However, they aren’t projects you can skip if they’re needed. While ROI may not worry you if you’re buying a forever home, you should consider it otherwise. Make sure to get a home inspection before making the purchase. That way, you can determine if there are any structural or system issues that you’d rather avoid.
Choosing Repair and Design Projects Strategically Is Essential
When deciding on repairs and design projects, you need to proceed strategically. Always begin with structural work and critical system updates. That way, the house’s bones are strong and your electrical, plumbing, and HVAC are handled when you have the most money available. After that, you have some flexibility. Just make sure that functional areas – like kitchens and bathrooms – get the right amount of attention. Otherwise, the house may end up less comfortable than you’d hoped.
Hiring a Professional Can Be the Best Move
While handling repairs yourself is an option, it may not be the best choice. If you don’t have renovation experience, your work might not meet local code requirements. Many repairs and updates require permits, and those usually come with post-work inspections. If the work is subpar, you won’t’ pass. Then, you’ll have to spend more to correct the problems. For large-scale renovations, you’re often better off working with professionals like Adamick Architecture. That way, you’ll know your project is handled correctly.
Deciding Whether to Stay Is Harder Than You Expect
After renovating a fixer-upper, you may decide not to make it your home. In some cases, the increase in value makes selling an attractive option. You may even discover that flipping homes is a passion along the way, causing this house to serve as a starting point of a business. Similarly, many people purchase fixer-uppers to turn them into vacation rentals or tenant housing. Whether that was your initial goal, it can be a great way to generate income. Just make sure you establish your business correctly, complete with an employer or tax identification number or EIN. That way, you can capture any tax deductions.
