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Mike is a Real Estate Specialist for Firelight at Highlands Ranch
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A Buyer's Dilemma: Monday, March 30, 2009
Should you buy a fixer-upper or a newly renovated home?
This is something buyers often don't put enough time into thinking about. One side of the debate is that if you can find a home in a good location and get it for a good price, then it'll be worth the time and money to improve the condition of the home. But doing so requires cash and unless you have spare money sitting around, it might make more sense to pay more for a home in a good location that already has the remodeling work done. Consider this example:
Home A: $300,000 built in 1973. Could use new carpet, wood floors need refurbished, interior and exterior paint need attention, appliances are on their last legs, windows are single-pane aluminum frame, wood shake roof is original and in need of repair or replacement. But it's a great location in a great neighborhood. Estimated cost for all of the above = $50,000.
Home B: $400,000 also built in 1973. Also a great location in the same great neighborhood as Home A but has been updated with new windows, carpet, appliances, refurbished wood floors, new roof and new paint with neutral colors. It's a fix & flip and the seller bought the home for $300,000 a few months ago, invested $50,000 into the remodel.
So here's the dilemma: if you buy Home A, you can do the remodel exactly how you want with exactly your choices for everything. If you do it correctly, then you might end up with a $400,000 home for a total of just $350,000. Sounds like a good way to go except...do you have $50,000 to complete the work? And can you live in the home in it's current condition while work is being done? The $400,000 home is ready to move in and your monthly mortgage payment (at today's 5% interest rate) would be about $650.00 more per month. Assuming the remodeled elements are to your liking, there's nothing more that you would need to do and you've basically financed the $50,000 you would have spent on Home A. That's like spending $50,000 over 6.4 years instead of all at once out of your pocket. Plus there's the tax advantages with the additional mortgage interest deductions.
If you can afford to buy a remodeled home rather than doing the work yourself, consider this example before you make any decisions.
Colorado recovery could begin this summer Wednesday, February 25, 2009
Colorado went through a bad economic year in 2008 and can expect more of the same this year, but there are signs that a recovery could start as soon as summer, a pair of Colorado’s top university business economists agreed Wednesday.
500 New Jobs in Douglas County Sunday, February 22, 2009
Just when you thought the Colorado economy was on a permanent downward spiral, here's some good news! Charles Schwab Corp. will bring 500 new jobs to Colorado by 2011, Gov. Bill Ritter announced Thursday January 15th at the state Capitol. This should help drive up the demand for homes in Highlands Ranch, Littleton, Centennial and other parts of south Denver. Let's hope for more good news like this.
