Fixer uppers can get expensive.
If buying a fixer-upper is your next big money move, make sure you’re not settling for something that’s going to cost you much more than you planned. Buying a house in need of repair can mean ample savings in the short term but a potential significant investment in the long term.
If you don’t know how much it’s going to cost to fund all of those renovations, you might be diving right into a money pit. Ideally,your budget for repairs and renovations should have 10 percent to 20 percent tacked on for unforeseen problems. Run into these problems, though, and your budget could go well over that. Here are six signs you’re moving into a money pit.
1. Water Stains“Water stains, those unsightly brown circles on the ceiling or the trickling brown lines on your walls, are a huge red flag to interested homebuyers,” warned Janice Hoffman, president and CEO of Signs of Success Realty Group in Belmont, Mass. She encourages home sellers to pay attention to flaws like these since those water stains can indicate a major roof leak.
According to Fixr’s Cost Guide, the cost of replacing a 10-by-10 foot area of a roof can run anywhere from $500 to $1,750, depending on where you live and what the project involves. If you have a larger or older home, your total repair and maintenance costs could be even higher.
2. Water in the BasementIf tornadoes, hurricanes and torrential rains are a frequent occurrence in the area, make sure the basement and home are protected from the elements.
“Just know that if your home has a basement and there’s been flooding before, the chances of recurring flooding issues are high unless you hire a professional to come out and ‘waterproof’ the basement, which can be extremely costly,” said Stephanie Sullivan of Dream Town Realty Brokerage.
Any puddles of water or small pools of water in the basement are a sign the basement might not have proper sealants or a fully functional interior water drainage system. According to the latest HomeAdvisor cost profiles, you’ll be looking at spending an average of $3,816 to waterproof the basement. But, your bill could reach $9,135 or more depending on the amount of work that needs to be done.
3. Musty SmellsIf that musty or musky smell trails well beyond the attic or an over-packed basement, you might be dealing with a mold problem in the home. If you’re looking at an older home, the chances of mold toxicity can be much higher.
“Mold is another sign that you might want to run away,” said Sullivan. Mold problems are not always easy to detect and might require a professional inspection.
Rose Ann Gould Soloway, a clinical toxicologist at the National Capital Poison Center, pointed out how actively growing mold in an indoor setting damages the structure of the home and can trigger allergies. Mold spores can grow even in the absence of obvious water leaks.
You’ll want to check for signs of mold around air conditioners, windows and cellar floors. If you find mold, expect to pay between $500 and $5,050 on the cost of mold remediation, according to HomeAdvisor.
4. Cracks in Drywall or FloorsSmall cracks in the drywall or flooring are usually nothing to worry about. But when you notice larger crevices and visible cracks in these areas, it could be a sign of damage to the foundation.
A cracked foundation can drastically reduce a home’s value and cause severe structural issues, according to the Foundation Repair Association. A few warning signs of a shifting foundation include doors and windows that are hard to close, cracks around doors and windows, and sloped floors — such as in bathroom and kitchen areas.
When it comes down to cost, you could be paying more than $10,000 or more when the repair work involves hydraulic piers, according to HomeAdvisor.
5. Signs of Pest InfestationTermite activity might not be easy to detect during certain seasons, since termite swarms can appear after a long winter or during other seasonal changes. According to PestWorld.org, some of the signs of a termite infestation include piles of discarded wings, mud tubes near the home’s foundation and cracked or bubbling paint in certain areas of the home. Cracking or bubbling paint can also be a red flag that there are water leaks present in the home, according to the experts at Great Western Restoration.
If the damage from termites or other pests is significant, you could be looking at spending money on structural repairs or replacing entire walls and other parts of the home. While a termite inspection could cost only between $65 and $100, according to CostHelper.com, the repairs and renovations you might need to make to counteract the effects of past infestations could set you back thousands.
6. Major Interior Design FlawsIf you aren’t completely happy with the pillars and columns in the hallway, the location of a wall or the size of the kitchen island, you might be thinking you can fix the issue with a home DIY renovation. It is a fixer-upper, after all.
Interior design projects might not look like they would be extremely costly or challenging, but it’s still buyer beware. In a podcast about flipping houses, Michael Woodward, a house flipper in Nashville, Tenn., shares how he’s always prepared to hire contractors to do much of the repair work on a property because even though he has the skills to do renovations on his own, it’s just not worth the time and stress. Instead, he budgets for contractors who can do the work so he can focus on other tasks.
You can find affordable — and reliable — contractors in your area on sites like Angie’s List to keep your project on track.
Source: Money Magazine
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