If you’re discouraged by the current seller’s market Washington DC is going through right now, you may consider expanding your search to a fixer-upper. Townhomes in Capitol Hill that need a little to no work are generally very attractive to buyers, especially those on a budget, but many homes in the DC metro area could use a little bit of love.
Before you place an offer on a home that needs some work — or a lot of work — consider the factors below. Deciding to go with a fixer-upper home versus a turnkey property is a significant decision, and it’s certainly not the right choice for everyone. Weigh the pros and cons before jumping into a big project.
Know a small project from a big one
It’s easy to walk into the Capitol Hill real estate market with rose-tinted glasses. Maybe the location of the home you’re viewing is perfect, or the piece of land itself is ideal for your life! But amid the excitement, you may overlook major concerns.
The perfect fixer-uppers should only need fundamental cosmetic changes — a fresh coat of paint, new carpets or floorings, and maybe some upgraded appliances. Updating lighting fixtures and resurfacing (not replacing) the kitchen cabinets are all fair signs that this fixer-upper is realistic for you.
Now, a big project can be a money pit. Signs of mold, leaky pipes, knob and tube wiring (which are still somewhat common in older Capitol Hill homes), or a kitchen with crumbling cabinets are all red flags that you’re setting yourself up for serious expenses. Whenever you walk a property, be it single-family homes or townhomes in Capitol Hill, always keep a critical eye or get a home inspector involved.
Understand your timeline
Supply chain issues persist, coupled with backlogs of work for most contractors; the result is lots of delays in general. If you don’t have an abundance of time for the home to get into shape before moving in, a fixer-upper is not for you.
Ask yourself if you can live in a construction zone
Do you have the time to oversee or handle construction?
Another issue many new homeowners run into is that managing a construction zone or renovations on a home can be immensely time-consuming. If you’re doing the work yourself, especially while holding a full-time job, it will take even more out of you.
If you already lead a hectic life, you will probably not have to properly oversee your Capitol Hill real estate renovation. When you hire a project manager for it, some of the work is taken off your plate, but certainly not all. Regardless, you need to be dedicated to the renovations and have the time to focus on them. Otherwise, the project could get out of hand quickly.
Do you have a backup fund?
Do you know the saying about best-laid plans? That applies to home renovations. When you’re looking at homes in Capitol Hill that need some work, make sure you have a sizable “rainy day fund.”
Construction costs are higher than they were roughly three or four years ago. A renovation that goes 100% smoothly, without anything coming up, and with zero extra expenses, is an extreme rarity.. If you can only reasonably afford the price of the Capitol Hill real estate itself and the minimum renovation bid, you should not stretch yourself for the home.
Financing renovations can be troublesome
If you can finance the majority of the cost of the home itself or the majority of its necessary renovations, you may not have as many issues. Some banking institutes will offer rehabilitation loans, but these will not allow you to do any of the work yourself most of the time. If you want to hire contractors for your renovations, this isn’t a problem, but a loan like this becomes an issue if you plan on doing them yourself.