How to Recognize Potential

It’s easy to overlook a fixer upper, especially if you don’t know how to spot it’s potential. But more often than not, a few simple fixes can quickly transform an outdated home into the home you’ve always dreamed of.

Having an open mind and taking on a few home projects, could open the door to finding a home in even the most sought-after neighborhood. A house that needs some work but is in a great neighborhood, will save you money on your mortgage and put you in a better position for appreciation on your house. As an added bonus, it will give you the opportunity to really make your house your own, by adding finishes and features that speak to your style and values. 

Here are six easy tricks that will help you identify potential in a home. We will also talk about common house features that are easy to fix, and ways to quickly spot characteristics that bring value to a property. In no time, you’ll have the skills to see through that horrid paint job or poor use of space, and see the real potential in any house.

6 ways to spot potential in a fixer upper

#1 – A Great Neighborhood

As I’ve mentioned in previous posts, locating yourself in the right neighborhood will put you in the best position possible for the highest return on your investment. If you decide to sell your home down the line, potential buyers will be drawn to your neighborhood, and more willing to pay top dollar for homes in a prime location. If you find a home that needs some work but is in the right spot, it may be worth investing in a less than perfect house in exchange for a larger return later. 

#2 – The House Needs Work, But Has Good Bones

An outdated home with a good layout is a great starting point for homebuyers in the market for a fixer upper, especially individuals who are new to home improvements. A house with great bones is an easier starting point for improvements because your baseline is already laid out for you.

I recommend hiring a good home inspector you trust to inspect the house before closing. If the inspection report comes back with minimal repairs and/or issues, this is a good indication that you’re onto something promising. 

#3 – Listen to Your Gut

If you walk into a house and get a good feeling, listen to your instincts. Alternatively, if you walk into a house and feel anxious or overwhelmed, you should listen to that too.

Keep an eye on spaces that have potential, as well as areas that appear problematic. Your intuition is a powerful tool, use it! No matter what your gut tells you, listen carefully. 

#4 – Seek Out Underutilized Space

While touring a home, pay very close attention to underutilized space that can be used more efficiently. Look for bonus rooms that could act as an extra bedroom, living space, office, storage, etc. Seek out rooms where additional space(s) can be created. Some examples might include, areas where an extension could be built, or an oversized room that can be split into smaller spaces.

Be thoughtful when you come across an odd layout. Many homes that are broken up with walls can be easily transform into an open layout, by strategically removing walls and encouraging a better natural flow.

Don’t forget about outdoor space, think about how alterations to the landscaping might improve the functionality or esthetic. Some examples might include adding foliage, replacing old fences, or adding a patio, deck or porch, etc. 

#5 – The House Meets All Your Checklist Requirements

You’re touring homes, and you find one that meets almost everything on your checklist, except one – it needs some work! It’s very unlikely that even the “perfect”, newly renovated home will have everything you are looking for. If you find a house that checks off all the boxes but needs some updating, that is worth considering.

Make it your goal to find a home that has all the features that are most important to you, and meets your needs. If you find a home that fulfills this goal, anything cosmetic falling outside of that can likely be modified or updated with a few renovations. 

#6 – Look Past Inexpensive Fixes

Too often, people get hung up on the details while looking for a home. A great example of this is HGTV shows like house hunters. Sometimes people get so caught up in the details, they forget to see the bigger picture. Do your best to look past items that are easily updated or replaced i.e. the “easy fix”. 

Here are a few examples of ‘easy fixes’ that can be altered at a relatively low cost:

• Paint & Wallpaper
• Doors
• Hardware & Lighting fixtures
• Stair/balcony Railings
• Appliances (Most appliance stores have sales over holiday weekends)
• Staging furniture layout (don’t get caught up by the furniture style, or how it’s arranged)
• Ugly Carpet and/or Tile
• Curb appeal (there’s always a way to put lipstick on a pig)
• Landscaping

Other Things to Keep in Mind

Contractor Estimates and Permit Costs

If you purchase a home in need of a full makeover, I recommend having a contractor, and an architect assist you with your project. Start by getting a rough estimate from the architect, contractor and any other consultants you need before you begin your project.

Phasing Construction

It may be worth phasing out your projects based on the funding and/or time available to you. Phasing renovations over a longer period of time can help you budget and save before moving on to your next project. Phasing can also help keep you out of debt, or avoid blowing through your budget too quickly. 

Practice Makes Perfect

Like most things in life, practice makes perfect! It takes time to train your eyes to spot potential, so if it doesn’t come easily at first that’s alright. These few simple tricks can help you get started, and with time and practice, you will see that identifying areas of potential will come more quickly and naturally.

Keep in mind that some potential isn’t always obvious. Sometimes it takes time for the space to tell you what it needs, and for inspiration to spark. Once you are living in a home, projects will present themselves to you and will be more obvious than they were at first glance, be patient with the process.

For more useful tips on how to avoid renovations that will quickly drain your wallet, read my post on 6 Easy Ways to Avoid Sneaky Fixer Upper Money Pits!

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If you have any questions, or would like to share some helpful tips of your own, leave a comment below or email me directly at melanie@pillartoposthomes.com