How to find a great fixer-upper

These days, most buyers are looking for easy, turnkey properties – ones where everything has been updated, nothing needs to be fixed and they can just move right in with zero effort. And while that's certainly great, you definitely pay a premium for a place like that. But if you're open to buying something that needs a bit of fixing up, you can get good value, buy in a neighbourhood that might otherwise be out of your range – and have the ability to customize the home to your style and preferences. 

A few years ago, my brother and I bought a distressed property in St. Thomas, Ontario with the intention of renovating and selling it. 

As you can see from the photos, this place needed more than a little TLC. But it was a great corner lot and a fantastic location – in a booming town with a good economy, great proximity to London, and really limited inventory. 

The house was in terrible shape, but we had a vision for it. We worked on it for about eight months – as it happened, we bought it right at the beginning of the pandemic, which added some unexpected challenges and slowed us down a bit. 

We basically ended up taking it back to the studs and rebuilding everything from the roof all the way down to the basement. We tore off an addition that was falling down, redid the backyard and made it a beautiful home. I couldn't be more proud of the final result!

It was the first time we'd done anything like this, and it was definitely a learning experience! Here are a few tips (some of which we learned the hard way) if you're looking to buy a fixer-upper of your own.

1. Focus on location, location, location.

This is, BY FAR, the most important consideration. How close is it to amenities, transportation and schools? How do other houses in the street look? Are they well-maintained or just as run down? What has happened in the area in the last 5-10 years – are houses getting updated? Is there buyer interest? Are businesses and developers interested in the area? A neighbourhood on the rise will always be a better bet for future value.

2. Do a comparison.

How does the home compare to others on the street? Is it the nicest one or the worst? Stick to a place on the lower side or in the middle for the best return. Don't forget to check comparisons after homes have been renovated – especially if you're planning to flip it. 

3. Be realistic about your skills and budget.

Renovating a home can get pretty expensive, so build 20-25% extra into your budget. It's also a good idea to overestimate how long it will take. Whether you're DIYing it or bringing in contractors, delays are inevitable. 

4. Get a great team lined up.

A good builder/renovator, architect and designer will be your best friends in this process.

5. Be prepared to move fast on a purchase.

Just because a place is run down doesn't mean other buyers aren't interested. Tie it up quickly with an offer that's conditional on an inspection or financing, or both. That way, you have time to do your due diligence without someone else coming in and buying it from under you. And if your inspector finds something you don't like or you get cold feet, you can walk away and get your deposit back.

6. Educate yourself beforehand.

There's a lot to know when you're doing a major reno, so getting all the information you can can help you prepare for speedbumps. We did so much work on the St. Thomas property that the town considered it a new build, and the property ended up being subject to HST on the sale. We didn't know that going in – had we known, we may have revised our approach to the scope of work. 

Ultimately, we created a beautiful home and sold it for a price we were happy with. And while our plan was always to flip the property for a profit, renovating a fixer-upper is also a great approach if you're buying a place you plan to live in yourself or picking up an investment property you want to rent out. 

Want to know more about the ins and outs of buying a fixer-upper? Get in touch – I'm always happy to share what I've learned!