SURVIVING A MONEY PIT
Unfortunately, despite our best efforts, it is sometimes impossible to foresee what issues may develop in a home over time. The most expensive defects usually include foundation, roof, electrical, plumbing, and HVAC. It is bad enough when one of these items goes bad but when multiple systems malfunction at the same time, a homeowner can quickly find themselves the proud owner of a “Money Pit” or “Vampire House”.
If this occurs, here are some considerations that a homeowner should evaluate:
Do I need to do repairs and why?
This seems like a simple idea but not all repairs are priority. Important questions to ask your self are if the home is still livable or if the defect causes a hazard. For example, no Air conditioning in Houston in August is much higher priority than noticing possible foundation movement. Keep in mind if you are considering selling or leasing your home at retail values, you will need to address any outstanding repairs.
How will I pay for these repairs?
House repairs never wait for our finances to get inline. If you are considering major repairs, you must consider how you will pay and how it will affect your other finances. Do you have the cash? Will spending that cash prevent you from doing other things you need to do?
Is it worth it?
How much is your house worth vs how much are the repairs? How will paying these repairs affect you financially? You need to think about these questions because it may not be feasible to sink 100K in repairs into a house with a current max value of $150K. Also, if completing repairs could expose you financially or put you at risk, you may want to consider an alternative.
Can I manage these repairs? Do I want to?
Many people don’t deal with repairs and contractors regularly so they don’t understand how they work. This can be a bad formula because many people don’t understand how disruptive home repairs can be to their lifestyle; but probably even worse, they don’t know how to deal with contractors. Contractors have been known to run way overtime and way overbudget. Some may not pay their subcontractors. Some may not be insured. And, one of the worst scenarios is that they sometimes take the money and run, leaving you with an unfinished home and no budget to start it over.
Is it possible to sell the house?
Maybe the answer is to sell your home to an investor and move on with your life. Investors are professionals at dealing with these types of situations and may be able to better address these problems. If you’re in this type of situation and think selling to an Investor might be your best option, try this company….
They should be able to help or get you in touch with someone who can!
Hopefully, this information is helpful in tackling excessive home repairs. If you have any further questions about this topic or any other real estate inquiry...
Give me a call or shoot me an email!