With D.C. and Northern Virginia's high real estate prices, is it possible to buy a single-family or multi-family home in a desirable neighborhood? The answer is yes.
… But there's a catch.
You might know that catch by its common name: fixer-upper. Fixer-uppers and distressed homes offer first-time homebuyers an affordable ticket into D.C. and Northern Virginia's most desirable neighborhoods. But there are a few things you need to know and do before you sign on the dotted line.
Expect the Unexpected
Many fixer-uppers are distressed homes – foreclosures, short sales and bank-owned properties that are often abandoned, neglected and vandalized.
Angry tenants have been known to break windows, beat up walls and floors, damage roofs, leave water faucets running and remove copper pipes. It's also not uncommon to find rodent nests and critters living in walls.
Short Sales Mean Long Closings
Some homeowners work with banks to avoid foreclosure, but this leads to a long paper trail of transactions—not a good option if you have a set move-in date.
Hire a Home Inspector
The best way to analyze your costs is to hire a home inspector. If you make an offer, build a home inspection contingency clause into the contract in case you need to renegotiate or back out completely after the inspection.
Benefits of Buying a Fixer-Upper
Since most buyers prefer turnkey properties, you can avoid bidding wars. There's also a range of assistance available for first-time homeowners, fixer-upper homes and single-family homes, including a $35,000 FHA 203K from HUD and the D.C. Open Doors Mortgage (DPAL) that could cover 100 percent of your required down payment at 0 percent interest.
Design Your Property To Rent In A Competitive Market: Ask a Property Manager
A well-informed property manager can recommend money-saving repairs and upgrades that give you the edge in a competitive rental market. Some suggestions to save you money, attract tenants and keep your building safe include:
- Energy-efficient appliances and systems
- Hard-wired smoke detectors
- Minimum bedroom sizes tenants expect
- Back patios and English basements
- Reliable intercom and security systems
- The ever popular rooftop deck (on every D.C. tenants must-have list)
- Bluetooth compatible built-in speakers that stream music throughout the house. (How cool is that!)
Do you have a good fixer-upper story to tell? Let us know.
– By Stacy Sare Cohen