Rule No. 2: Find a fixer-upper with quality construction. That first house was cheap, costing less than our combined annual income at the time. But everything about it was cheap, including the materials used in its construction. And that led to a rodent infestation, among other things. (I think our record was catching 14 mice in a 24-hour period.)
On the other hand, our second house has "good bones." Maybe it needs lots of work, but at least the extra work will be built on a good foundation. Ah, but "lots of work" means mostly major, expensive projects.
Rule No. 3: Pick a fixer-upper in need of cosmetic upgrades instead of major, expensive projects. Well, of course! We didn't put lots of money into our first house. Instead of fixing the foundation or updating the kitchen, we did inexpensive things like painting, pulling out old, overgrown bushes and replacing the carpet.
And the new house? In the five years since we moved in, here are the projects we've completed: refinished all the wood floors (all 1,800 square feet of them), replaced the roof and some windows, rewired the house, renovated a bathroom, fixed the barn roof, and replaced the leaking toilets and one of the rotten bathroom floors.
That doesn't even include the projects we had to hire out, like replacing part of the barn foundation or putting in a new septic system.
It also doesn't include the projects yet to come. Despite the copious amounts of cash we've poured into this place, it still looks like a fixer-upper on the outside. We're used to the squirrel-gnawed siding and the peeling paint, but we recently got a glimpse of how it looks to others.
This summer, we hosted a shrimp boil on the front lawn with lots of people, including a couple of dozen kids. As I walked around the tables handing out cocktail sauce, one 6-year-old said, "Hey, who lives here?"
"I do," I replied.
"Well, you need to paint this house!"
No, buddy, what we really need is new siding.
Counting the siding, new windows, and a few other projects, I estimate that we have an additional $25,000 of updates to go, before we start the bathroom and kitchen renovations . . . and that doesn't count the $30,000 we've already spent. According to a recent appraisal, the house is worth less now than when we bought it.
Ouch. Next time I'll be following my own advice and applying this formula: Price of house plus cost of repairs equals the average home price in the neighborhood.
So before you fall in love with a fixer-upper, ask yourself if this is a decision you can live with. And in.
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