Bathroom remodel © Digital Vision, Photolibrary

Fixer-upper (noun). A home you purchase at a reasonable price, but one that requires an unreasonable amount of money in repairs and renovations.

OK, so I made up that definition, and it's not always true. Buying fixer-uppers can get you more house than you would normally be able to afford at a reasonable price. They can be pleasantly inexpensive. But they can also be money pits, masquerading behind a façade of charming woodwork and arched doorways.

As tempting as the purchase price can be for houses that need a little TLC, you must assess whether a fixer-upper is right for you. To do that, you need an appraisal. And I'm not just talking about the house.

An honest appraisal of yourself

I believe even a carefully selected fixer-upper is really a bargain only if you can do the labor yourself. Even though my husband and I come from a long line of blue-collar workers, we have a lot to learn. Still, we have people to ask. Between our two families, we have two HVAC technicians, a plumber, an electrician, two ex-carpenters, a concrete worker and two nurses (just in case the renovations don't go smoothly).

It's more than knowing how to do repairs, though. Even if you can do most of the labor yourself, do you want to? For instance, my husband loves doing electrical work but doesn't enjoy carpentry. That means our windows remained untrimmed for a long time, but I'm not surprised that we have a great fuse box.

Then there's living in the middle of endless projects. Since we renovate after our day jobs, sometimes we live in the middle of projects for a long time. When we refinished our wood floors on the main level, I came close to going crazy. There was dust everywhere, for too long.

And do you have the necessary tools? Even though we have the main tools like hammers and drills, we also share the really expensive or less commonly used tools among family members. Tools are expensive. You may want to borrow or rent tools that you won't use often.

The other honest appraisal

You also need to know as much as possible about the house. A home appraisal and a thorough home inspection should tell you what you need to know. What's it worth? If it's an old house (and most fixer-uppers are), how is the foundation? How old are the plumbing and wiring? Is there evidence of mold or water damage? Does it need a new roof?

Once you know what the house needs, you need to ask whether you can afford to address these things. Unless the house is dirt cheap, or you have access to inexpensive materials, you may need to find another house. Issues like mold or a foundation in disrepair are expensive to fix, so you may or may not get your money back in home equity.

A tale of two houses

We've owned two homes. And while both needed a lot of work, they were completely different.

So what was the difference? The first house sat on the edge of a town with notoriously low prices for real estate. It was a mediocre house in a mediocre neighborhood. Because of that, we needed to buy the house at a price lower than the surrounding houses. Which brings me to rule No. 1.

Rule No. 1: Buy a fixer-upper at a cost (way) below the rest of the houses in a good neighborhood. By following this rule, your improvements will bring your house up to (or slightly exceed) the value of the surrounding properties. You won't recoup your costs if your renovations result in "too much house" for the neighborhood.

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