Is it really a good idea to buy an old house which needs some rework? [closed]

Question

Long ago I read somewhere that it is best to buy houses that need some amount of rework rather than those in tip-top condition. The reasons given were:

1. There is less competition from other buyers so can be be bought more easily

2. Less money required from mortgage lender which is the loan on interest

Once such a home has been bought, a person would spend money on it to bring it into good condition (which is subjective), possibly over number of few years. Usually this would (atleast) involve cleaning up the place, mowing the gardens, new paint, new wallpaper and new carpet at the very least.

In other words, find a run down house and then make it beautiful. Can get house for cheaper and then work to renovate it gradually.

Now my question is simple. Since such houses are going to be old and possibly not well maintained for some time, what are the main risks in buying such houses and what should one look out for so we don't end up with a rather expensive mistake and regret it?

Answer 1

It depends entirely on the way in which the house is run down.

Hire a reputable house inspector to thoroughly examine it. It won't be 100% reliable, but the report will give you a good idea of what is wrong and what is still okay with the house. For instance you might see things like:

• You'll need to replace the furnace within a year or two.
• The roof shingles/tiles should be good for another 10 years.
• The foundation has recently cracked and part of the structure is sagging.

The first one means you know you'll need to spend some money soon, so consider that amount as part of the purchase price of the house.

The second one means you'll have a big expense down the line, so spread that amount out over time.

The third means that you are going to have leaks, with dampness or flooding, and that the building itself might no longer be structurally sound. Repairing this might end up being more expensive than tearing it down and rebuilding.

If there are problems of that last type, stay away.

If all the problems found are of the first and second type, with predictable cost, and if all the obvious problems you can see yourself are cosmetic, then if you still think it's worth the adjusted total price, go for it.

There will of course be other problems with severity between these, and there will be seemingly small problems that turn out to be cans of worms, so you'll have to use your own judgement. There will always be risk. Nothing is certain.

It also makes a huge difference whether you are going to do the repairs yourself or hire someone. You can buy a lot of pipes and fittings for a few hundred pounds, but hiring a plumbing company to do the upgrades could cost you tens of thousands.

Answer 2

I think worst option is buying buildings made between 50s and 90s of XX century: those are leacky and usually ment to last less than a century.

Building from XIX and first XX cent. are ok: big walls quite well insulated but you'll only have to pay attention to toxic materials: lead pipes (usually drain), asbestos tiling and also you should re-do windows and doors and a good thing is full electric rewire.

Older buildings are good, but you'll have issues with the department of cultural heritage when trying even minimal modifications (ex: you should keep old leaky windows just because are 'historic')

Answer 3

Keep in mind, that the only way this really works is if you invest your time and effort into fixing it up. Paying other people to fix it up negates almost all of the increase in equity. The things you list are things that people commonly want to change anyway, so that is not going to really help you get a better deal in my opinion.

Storytime: I bought my first house at 9% under ask, but I knew it was in rough shape; 5 months later and the drain, waste, vent system and electrical system were replaced, I had gutted three rooms and replaced the rotten and/or termite ate wood, refloored (down to the joists), insulated, drywall, painted and finished. I added a bathroom and completely redid the kitchen and existing bathroom. My labor and time were investments into the house; so long as you are of the same mind, you’ll do fine.