How I Turned My First Home Into a Profitable Fixer
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When I was a tenant, I loved to watch these house shows on television and see the transformations that took place there. It was so appealing to think about taking a space and shaping it to your personal taste. But as much as I enjoyed those shows, I never thought the first house I bought would be a fixup. So much for planning!
I’ve written about the process of buying my first home before, so consider this second part of the story. My boyfriend (now husband) and I were looking for a place of our own knowing it would be a first home. What we didn’t know was how soon we would move out and what profit we would end up making on this house. Here’s how it happened.
Leaving with a plan we could afford
We were able to find a house that was well within our budget, which meant we didn’t have to struggle to pay the mortgage each month. But since we lived in such an expensive part of the country, an “affordable” house meant a house that needed work. We knew this from the start, so we were able to budget the cost of the renovation into our plan.
We also knew, after visiting the house several times and doing a thorough inspection, that the bones of the house were strong. I was happy with that, because it’s not as much fun spending thousands of dollars on a new roof, windows, or plumbing as it is on design elements you’ll see every day. We also had no plans to move any walls or add square footage, so going in we knew our expenses would be less than they would have been for a gutting job.
Find the right contractor
Our first big step after moving in and eating festive burritos on camping chairs in the empty living room was finding a good contractor. We searched online and took a few recommendations before coming across three that looked promising – and it was almost comical how easy it was to choose. The former didn’t seem to care too much since our project would be small by his company’s standards. The second decided to include a ton of extra work in his quote that we hadn’t asked for, skyrocketing the price. (Rip out and redo all the insulation, just because? No thanks.)
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The third contractor was nice, understanding that we were first time homeowners with lots of questions, and ran a small business, which meant we would get lots of personal attention. Oh, and his price was the lowest by a significant amount. Bingo.
We discussed our plans, established a price and signed the contract. All of a sudden we were living in a construction zone.
Do all we could ourselves
It’s probably no big surprise that our six-week plan turned into a three-month reality, because that seems to be the case with just about every renovation you hear about. But to get things done and save money (and to feel more involved in our new home), we tried to do some of the work ourselves where we could.
We removed some of the kitchen cabinets that we knew we weren’t keeping. We went to tile stores, big box hardware stores, and appliance stores to pick out and buy just about anything that would fit in the house. We demolished a pergola and a garden shed and replanted all the plants in the garden. We left all the big chunks up to the build team, but those little contributions still made a difference. And little by little, it was transforming from a house that we had bought into our own house.
move in, move out
We had chosen all the finishes for the house keeping in mind our own tastes, but also with the idea that one day we would sell the house. We also wanted it to appeal to future buyers. And I’m so glad we did, because sooner than expected, we were ready to leave the Bay Area and cross the country. Almost exactly two years after buying the house, we put it back on the market.
We had kept careful records of every improvement made during our renovation. This was useful not only as a sales tool to show potential buyers, but also as a way for us to track the true cost of our first home ownership experience. And because it’s the Bay Area, housing prices continued to climb over those two years, even in the city we were in, nearly 20 miles from San Francisco. These rising prices, combined with the work we did to spruce up the house, allowed us to sell it for much more than we paid, even taking into account closing costs, interest on the mortgage and renovation.
It might not have been the same if we had bought a house that was ready to move in from the start, or if we had chosen a property that needed a ton of major repairs. But because we found a place we knew we could afford and had budgeted for the improvements so we didn’t have to go into debt, we ended up walking away with a generous profit.
It wasn’t easy and it wasn’t our dream home, but it was exactly the home we needed at this time in our lives.
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