Can You Turn an Ugly House Into a Beautiful Home?

Estimated reading time: 8 minutes

When fewer homes are available for sale, it may be more difficult to find one that won’t require some upgrades or additional work. Even if there are plenty of homes for sale, a “fixer-upper” may be a valuable purchase with a bit of creativity and repairs. Before immediately dismissing an “ugly” house, it may be worthwhile to consider that, with some renovations, an outdated house can become a lovely home. You may even be able to get a home improvement loan for remodeling or even fold the cost into the mortgage loan itself! If you’d like to know more about the process, the costs, and ways to upgrade an available home, read on.

Renovating an existing house requires careful planning, a good sense of space and design, some expertise from professional contractors, and (sometimes) the willingness to get your hands dirty. With an acceptable offer price appropriate for the amount of additional work and expense required, the result can be both aesthetically and financially advantageous. In the end, you may be able to transform the house in the way you want and have a home worth more than the sale price and renovation budget combined. Here are some key expectations and actions when purchasing a less-than-perfect home.

INSPECTION AND EVALUATION
Before starting any work, it’s essential to have the house professionally inspected. If the property is listed “As Is”, the seller usually is not required to make any repairs discovered during an inspection. Ideally, the inspection will have been completed shortly after the offer as a contingency and in no situation should you make an offer for an “As Is” property without an inspection contingency clause unless you are willing to deal with the consequences of such an offer. Regardless, you should make sure that one is done to gain a solid understanding of the condition of the home. A good inspection by a qualified, certified specialist will help you identify structural and other major issues such as plumbing and electrical problems,  an old roof or siding, or any other repairs that will need to be made.

BUDGETING
Set a budget for your renovation project. Remember, unexpected costs often arise during renovations, so adding a reserve amount is always a good idea. Budget for 10-15% more than you initially think you’ll need. If any renovations are to be made over a longer period of time, it’s a good idea to budget according to those timelines. Below are some resources for estimating what some repairs will cost.

  • HomeGuide.com – choose the type of work then view a few estimates based on the amount of work needed. In addition, scroll down to read detailed costs of each repair.
  • Modernize.com – click on Explore Home Improvements or Estimate Home Project Costs
  • This Old House – click on Home Improvement A-Z

Of course, if you’re paying for the inspection, be sure to ask the inspector for a ballpark estimate for the repairs and renovations you would want done in the immediate future. Chances are good that the inspector may want to charge you a little more for this effort but it may be worthwhile to ask. Otherwise, you may find “8 Critical Factors for Choosing a Contractor” helpful, or you can simply ask me to provide you with some local service providers that have been recommended.

PRIORITIZATION
Once the estimates are complete, any and all repair tasks need to be prioritized. Obviously, repairs to address safety concerns are non-negotiable and must be completed first, but remaining repairs should be categorized according to your needs, budget, and preferences.

  • Structural and Safety Issues
    The first priority should be to address any structural or safety issues. This includes any problems with the foundation, roof, electrical system, or plumbing. While these types of repairs may not be the most glamorous parts of a renovation, they are crucial to the home’s safety and functionality.
  • Major Systems
    Next, you should address major systems like HVAC (heating, ventilation, and air conditioning),  bathroom fixtures, and flooring which are essential for the home’s comfort and functionality. Be sure to get estimates from at least two different sources.
  • Layout and Design
    Once the home’s structure and major systems are in good shape, you can focus on the layout and design. This might include removal of walls to create an open floor plan, adding rooms or bathrooms, or updating the kitchen.
  • Decor
    Finally, finishing touches can be considered such as changes to faucets, light fixtures, door handles, paint, backsplashes, and other minor cosmetic changes.

DESIGN PLANNING
Before you start the actual design and layout renovations, you should create a design plan for each room in the house. You might wish to hire an interior designer for this step or you can do it yourself with the help of some online tools and software such as:

Remember to consider factors such as the purpose of each room, natural and installed lighting, traffic flow, functionality, and the overall style of the home that you want to achieve.

DEMOLITION AND CONSTRUCTION
Once your plan and budget are in place, the next step is demolition and construction. Demolition doesn’t mean you’ll be tearing down the house. You might only be tearing down a few walls, replacing some floors, or maybe changing the house’s layout. If you’re handy and looking to save money, you can do some of this work yourself. Otherwise, hiring a contractor might be the best option. In all cases, be sure to seek the advice of a professional before removing structural and load-bearing walls that may also contain pipes and electrical wiring.

RENOVATE MAJOR AREAS
It used to be that kitchen and bathroom upgrades provided some of the best returns on a homeowner’s investment, even though they tend to be the most expensive areas of a home renovation. In recent years, however, other renovations may have taken center stage as the best place to put your money. While opinions vary on which improvements are the best, the ones with usually the highest value are listed here:

Sources: Fortune Builders, Bankrate, Zillow, Renofi

These days, lower and mid-range improvements appear to yield the highest returns. Aside from those listed above, don’t forget that other little things can also make a big difference. Consider investing in quality light fixtures, faucets, door handles, cabinet, and door pulls, or ceiling fans just to name a few areas.

MINOR IMPROVEMENTS & DECOR
Once the renovation work is done, cosmetic or minor improvements can be tackled. This may include adding or updating trim or molding, installation of flooring and backsplashes, and upgrading fixtures or hardware. Choose a color scheme and style you love, select a good interior paint color and pick accessories that will complement your newly remodeled area. If you’re having trouble figuring out which style is best, read “Decorating Ideas to Complement Your Home Style” for some pointers.

LANDSCAPING
Last but not least, don’t forget about upgrading the outside of the home. Well-designed landscaping and outdoor spaces can significantly improve curb appeal and create enjoyable outdoor living spaces. Adding visual appeal to the outside of your home doesn’t have to break the bank either. Check out “21 Unique Landscaping Ideas for Your Home” for some inspiration.

FINANCING
In some cases, you may be able to obtain special financing for your remodeling projects that won’t require you to pay anything additional out of pocket. Fannie Mae offers a Homestyle Renovation loan that can be incorporated with a new home purchase or with a refinance of your existing loan. HUD also offers 3 different types of loans for home improvements:

  1. FHA 203(k) or Rehab loan
  2. Title I Property Improvements loan
  3. Disaster Victims Mortgage loan in the case of a loss from a disaster.

Finally, the USDA provides a Section 504 Home Repair loan for owner-occupied properties in a rural area that meet the household income requirement. Of course, a HELOC or Home Equity loan may be a suitable option if you already own the home and have built up some equity. 

THE PAYOFF
While increased home value is always a desirable outcome, only you can put a price tag on the value that renovations and repairs are worth to you. To recap:

  • Increased Home Value: Improving a property through renovations usually increases home value. Thoughtful planning and careful selection of materials may increase the value more than what was spent.
  • Customization: Renovating an existing home allows you to customize your living space according to personal tastes, needs, and lifestyle. By creating the space in a way that works best for you, additional value is created that you will appreciate.
  • Improved Functionality and Efficiency: Remodeling projects can make a house more functional and efficient. This might mean creating an open floor plan, adding more storage space, or updating systems for better energy efficiency. These changes can make the home more comfortable to live in and can also result in cost savings on utilities.
  • Maintenance and Safety: Over time, houses can develop issues that require repair. Renovating can address these problems, potentially preventing more extensive, more costly issues in the future. A well-maintained house is also generally safer to live in.

If you are considering a purchase of a new home, don’t be too quick to overlook one that may need a bit of work. Remember, this process takes time and patience. Some people choose to live in the home while renovating, while others may find it easier to live elsewhere during significant construction stages. Whatever you decide, remember that the end result – a house transformed into a lovely home – will be worth the effort!

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