5 Things To Look For When Purchasing a Fixer-Upper

If you’re planning to invest in a run down property, make sure it’s located in a neighborhood that’s a good investment. There is no real point in investing tens of thousands of dollars fixing in home renovations if homes and buildings are dilapidated. And the neighborhood is riddled with crime. The fixer upper home may be renovated beautifully, but it won’t matter because the neighborhood is unlivable and no one wants to move in.

I have experienced to first hand. I found a beautiful home online. It was located in the city of Garden Grove and it was stunning. However, when I searched the address of the property, I knew the something was amiss.

The home itself was beautiful, but it was located about 200 yards away from a major highway and busy intersection. The surrounding homes in the neighborhood was totally run down as a result of its unfavorable proximity. When I researched at some of the comparable homes for sale in the neighborhood, I noticed that they were a two thirds of the asking price of the investor’s property.

If you’re planning to buy a fixer-upper, make sure it’s in the right location where the buyer demand for homes in the neighborhood is high. And don’t purchase the highest priced home on the block, because your house’s market value will be driven down to match the values of the homes in the neighborhood. And in this case, it continues to drop the value of the price down and the home is continuing to sit on the market — making that major renovation in the investment property, a poor decision.