For those looking to invest in Santa Cruz real estate or who would like to customize a home to their specifications, buying a fixer-upper home can offer an entry-level introduction. The real-life world of fixer-uppers is much different than it is portrayed on television – you won’t benefit from post-production editing to make your job seem easier. If you approach the job with preparation and understanding of the risks and hurdles, you can make a fixer-upper a success.
First things first – are you sure you want to renovate a home?
Like any involved undertaking, buying and renovating a home in Santa Cruz requires careful planning in order to increase your chances of success. Approach the renovation like a project at work – because it will become your job for the duration of the renovation. Think about the work and money required and what your living plans are during the work. If you are going to be living in the home, picture your daily life punctuated with construction workers, ongoing projects and limited access to areas of your home.
Some people enjoy the kind of chaos created by a fixer-upper project or are willing to endure it for the big payoff of a better living environment. Just plan for the project to take longer than you initially expect – as delays and bumps in the road are all part of the renovation experience.
You should develop a clearly defined plan with a solid budget for the project. Pad the budget with a 10-20 percent buffer, as expenses also tend to increase as a renovation proceeds. Start your planning well before you shop for a house.
Renovation buying process
Depending on the renovations you are prepared to undertake, searching for a fixer-upper home in Santa Cruz can be simple or tricky. The best deals are hard to find – so if you are looking to buy low, invest minimally and flip for a big payday, but understand that a lot of things need to neatly fall into place in order for that scenario to happen. More likely, you will be successful in finding a home that needs cosmetic work to modernize it for your taste or for sale to a future buyer.
The good news is that most cosmetic work is relatively easy and inexpensive, and these properties are not difficult to find. Search online looking for homes with “needs TLC,” “fixer-upper,” or “handyman’s special” in the description keywords.
Another simple tip is to determine the area and search from the lowest-priced upward, as homes that need work will be priced accordingly in many cases. For this process to be effective, you should know your real estate market. For example, the average listing price in Santa Cruz is $1,200,000.
Which renovations are worth the work?
Once you have identified your desired area and some potential homes, think about which projects make the most sense for the properties, your budget and your plans. Some renovations provide a return on your investment and others are more for your enjoyment while residing in a home. While a new kitchen or master bathroom are both generally great ways to jazz-up any home, it’s important to ensure that the renovations are in line with the rest of the neighborhood. A high-end gourmet kitchen remodel may not recoup its investment in a neighborhood of modest homes, for example. Removing a bedroom to make room for a master bathroom also may be a misjudgment if your value is ultimately decreased.
You should also consider which jobs you can do yourself and which require a professional’s touch. Painting, light carpentry (such as cabinets and trim) and adding new fixtures are good homeowner jobs, while structural, electrical and plumbing jobs are best left to the pros. For DIY projects, include buying or renting the right tools in your budget and plan. This includes using the right power tools such as drills, sanders, and jigsaws.
Selling versus remaining in your fixer-upper
A final consideration is whether to sell your Santa Cruz home or live in it once it’s fixed-up. In general, if you plan to stay in the house at least five years, you’re more likely to recoup the cost of renovation, so it’s usually best to live in the property for several years. If you are able to find a house deeply below market price and the market supports a sale at a figure that would pay you a profit after all expenses are considered, then your time to sale may be shorter.
Ultimately, a well-considered plan is your best tool for a fixer-upper project. You can better identify homes and your market, and spend your money and time wisely.