Do you have to be an interior designer, construction worker, or investor to buy a “fixer-upper”? No! While it would be beneficial to fall into one of those categories, doing remodels on your own or on a budget are very accessible in today’s world. So why should you consider a fixer-upper if you weren’t before? Here are three reasons why buying a one might actually be a good idea, regardless of what you thought before.
1. Save Money!
Buying a fixer-upper could be the key to getting you into your dream neighborhood. The North Shore of Oahu is a small neighborhood with above average pricing. For example, according to Hi Central’s Market Statistics, average home prices on the North Shore of Oahu in 2017 were $890,000. This is up 10% from last year and over $100,000 more than the average single-family home price on Oahu.
A recent transaction taking place in July of this year in the Sunset/Velzyland neighborhood went for $775,000, over $100,000 less than the neighborhood average. The home needs some updating, but with a little elbow grease, you could greatly increase the value of this home. In the past 360 days, there have been 6 homes that have sold in the Sunset/Velzyland neighborhood whose sale price averages $1,080,000. If you can get your hands on a lower priced fixer-upper and put even just $100,000 in updates into the home your return will be well worth the effort you put into it AND you’ll be living in your dream neighborhood! In Hawaii, a jumbo loan is required to finance anything over $720,000 and lending requirements become stricter. Buying a fixer-upper could keep you below that jumbo loan amount and get into your dream home!
2. Add Equity
The cost to renovate a home and add maximum value for resale is a case by case basis. However, depending on the numbers and your renovations, you could instantly add value to your home. Whether it is an investment property or your home, sweat equity is valuable and the time you put into your home renovations will pay off exponentially. A friend of mine bought her home in Honolulu in 2012 for $500,000. It was a great deal, but almost a tear down. She has been living in it and renovating it with the help of her family members. In the second half of 2017, 7 of the 11 homes in her neighborhood have sold for over $1,000,000! If you have the time and patience to renovate your investment, buying a fixer-upper is a great way to add a lot of equity to your home.
3. Personalize Your Home
If you can look past the stained carpets, the ugly or chipping paint and the outdated kitchen/bathroom, you’ll see your future home as a modern luxury. Another friend of mine bought his old wooden home on the mountainside on the North Shore overlooking the ocean. I took a tour of the inside when he and his wife bought it and could feel the strength in the homes’ bones. However, it was just so dark inside!
He and his wife remodeled the kitchen and made some other updates, and now the dark wood provides the most beautiful natural accent to their “Better Homes and Gardens” kitchen update. The kitchen features an open floor plan with an island in the middle of the room providing a lot of counter space. The light walls and updated white tiling accent open up the space by adding light in contrast to the before dark and closed in feeling. It was a new home when I walked in after the remodel! My advice is to look past the imperfections and focus on the real estate mantra of “location, location, location.”
With some time, energy and vision, buying a fixer-upper could be the key to your dream home.
Call me or email me if you want to explore your options!