My partner, Realtor Jennifer Dunbar, and I spend a fair amount of time looking at houses. I often bring my construction experience along when she is evaluating properties with buyers, and we are currently looking for a rental property ourselves. Between the two, we have probably looked seriously at 30 houses over the past year.
After walking through that many homes, I’ve found that one of the most important questions isn’t: “How much work does this house need?”
It’s: “What will we have when the work is finished?”
After the initial walkthrough, step back and look at the big picture.
Does the property have something compelling?
A great view, exceptional setting, privacy, mature landscaping or something else that cannot easily be created? Location matters, including whether the neighborhood is improving and where future value may come from.
Does the house have good bones?
Can the existing floor plan be improved into something that really works, or will you
spend a fortune and still end up with a mishmash of rooms?
Sometimes rethinking furniture placement, opening a room toward a view, or changing
the orientation around an outdated fireplace can transform a house. Other times, the
basic structure is fighting you at every turn.
Then look beyond the finishes at the expensive things:
- Heating: Is the system adequate and reasonably modern, or are you dealing with
obsolete electric heaters or equipment that needs replacement? - Insulation: Is the house actually insulated? Many older homes have little or no
insulation in the exterior walls, roof, attic or crawl space. Proper insulation can make an enormous difference in comfort, heating costs, energy efficiency and resale value. Adding it later can be surprisingly expensive if walls or ceilings have to be opened. - Electrical: Older homes often have too few outlets, inadequate panels and little or no built-in lighting.
- Fireplaces: Large older fireplaces can dominate a room, block views and no longer fit the way we live. Modern design tends to orient living spaces more toward the outdoors.
- Plumbing: What is behind the walls—copper, galvanized steel or something else
that may need replacement? - Windows: Fogged glass may be a simple glass replacement—or require replacing
the entire window, which can mean disturbing siding or stucco. - Water damage and dry rot: Assume there is more than you can see. Fresh paint,
particularly an all-white interior prepared for resale, can make past problems difficult to spot. - Kitchens and bathrooms: These are expensive rooms to rebuild, relocate or create from scratch.
A home inspection is important, but inspection reports naturally contain pages of
individual deficiencies. Don’t let a long list of small items distract you from the larger
question.
Are you putting money into a house with the potential to become substantially better—
or putting money into a house whose fundamental limitations will still be there when
you’re finished?
That is often the difference between a true fixer-upper and a teardown.