If you have been considering the purchase of a foreclosure or other Tampa Bay home in need of repairs then here are a few money saving tips and ideas to help you decide if the price is right.
1. Find Out if it qualifies for free money. Depending upon the property, your personal income status, the type of real estate involved and the repair or upgrade being performed there may be free money or rebates available to offset the cost. Common examples include special energy assistance grants or rebates for installing energy efficient air handlers, water heaters or other upgrades.
2. Always get three quotes first. Even if you intend to perform the work yourself it is a good idea to get at least three quotes before starting. Not only does it help manage costs in the event you are unable to perform the work but it provides a good idea of the average cost (including labor). Remember, the lowest estimate isn’t always the best – find out what is truly involved by comparing all quotes.
3. Call insurance before starting. Don’t assume you can purchase insurance while performing major repairs. This is especially true if the home doesn’t have a current certificate of occupancy or if it will remain vacant for 30 days or more while repairs are taking place. You may need a different type of policy. Also, policies can be hard to come by until homes are brought up to date. Don’t risk your financial future by buying a home without proper insurance – especially if you intend to finance a portion of the price.
4. Understand building codes and update requirements. Major renovations to a Tampa home or property often result in the need to bring the home up to date on current building codes; common examples include updated wiring, plumbing or structural considerations.
5. Financing can be tricky. Make sure you have the cash reserves required to finish the job. It’s also a good idea to understand what is and isn’t possible when financing a fixer-upper; Tampa mortgage brokers are likely to require larger down payments on homes in need of extensive repairs.
6. Taxes, Taxes, Taxes. Capital Gains can take a big bite so understand your situation. Crunch the numbers to see what works best for your individual situation; some investors find holding a property for 1 year and 1 day makes more sense in the long run than selling right away while others find a 1031 exchange to be the best route. Each situation is different so do the math.
Whether you are looking for foreclosures or bank owned homes we can assist you with all your needs. Please give us a call today.