More and more, we find that buyers are looking for a perfect home requiring literally zero updates—countertops, light fixtures, flooring—all the exact types and colors of their dreams. Since this scenario is next to impossible (though I wish!), there are two ways we can go about recreating the dream: The first is buying a new development pre-construction. However, with new construction, there is a premium to pay as you are buying a home that has never been lived-in and has all new finishes.
The second option is for buyers with a knack for design and/or time to manage a project (whether big or small). We fondly call this option a “fixer upper.” Buying a fixer upper is usually a way to get more bang for your buck, because you are putting sweat equity into the home.
And, a “fixer upper” doesn’t always mean a gut-rehab, and doesn’t necessarily mean something old. A great option for many buyers could be a property built 10 years ago, so most the mechanicals are working well, and all you have to worry about is the finishes. These sometimes tend to be a win-win scenario as the remodel won’t be as extensive (more cosmetic than structural), won’t take as long, and the buyer still get the home exactly how they want it.
With buyers interested in some sort of fixer upper, we inevitably stumble onto the phrase that everyone kind of loves to hate: “good bones.” We throw it around all the time, but what does it actually mean? After putting a good deal of thought into it, I’ve written down the list that previously only existed in my head. It’s the checklist I always use when helping buyers vet fixer uppers, to make sure they make financial, logistical and practical sense. Here goes!
“Good bones,” definition by the Busby Realty Group:
Location: If you are going to invest in a fixer upper, this is honestly the most important ingredient. If you are going to invest money into rehabbing a home, you want the best upside potential, so location is key. Things to consider are neighborhood schools and in the city, you absolutely should be within walking distance to the L. I would also recommend not being on a busy street. You will seriously hurt your resale potential if you over invest in a property that is not in a great area.
Age: Vintage is always going to be harder to update than something from the 90s on. This isn’t a deal breaker for all buyers, just know that if you buy something old, you are almost always going to be updating plumbing and mechanicals. Read: additional time, money, and logistical consternation. Also, more recent builds generally feature less walls, so if you are looking for open concept you have less to deal with here too.
Kitchen: The kitchen is a great place to invest, so I actually love finding properties with bad kitchens. You pay less upfront for the property, and then spend even $15-$20K to make it great.
Flooring: While hardwood floors are always my first choice, if you aren’t planning on living in the home forever, do what makes economic sense for you. Carpeting is easy and cost effective to replace, so gross carpeting is far from a deal breaker. If you end up installing new hardwoods, I usually recommend white oak as it is not a costly wood choice and it is versatile – it can be re-stained numerous times and also stained almost any color you want without any undesired undertone.
Windows: People always remember to check on the state of the roof, but sometimes forget the windows--don’t! Replacing windows can be a huge undertaking and expense, and should be factored into the sales price of a home. If you do end up buying a home that needs new windows, consider expanding the size when you replace. You will never regret the extra natural light, and big windows are great for resale too. Consider black frames on windows too, those can make a big impact.
Water: Last but not least, you and your inspector should be on your hands and knees checking for any potential water issues--stains, mold, moisture. Again, I’m not saying that if you find something it’s an automatic deal breaker, but you should know what you’re getting into and how your precious budget dollars will get allocated once you’re the proud owner.
So there you have it. It’s not a glamorous list, but hopefully a helpful one as you embark on some big decisions. Buying fixer upper is kind of like the opposite of making sausage: you want to know EXACTLY what is going in, so you know exactly what you will get!