3 Little-Known Surprises That Can Make or Break a Fixer-Upper Home

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Buying a fixer-upper can save you a ton of money, or it can break you slowly. Here are some surprises to be aware of when shopping for a fixer home. 

I’ve spent a lot of time around fixer-upper houses both as a professional and living in one myself. My house was abandoned for about four years, it was being eaten by the landscaping, and it was a reckless nuisance to the neighbors. I’m sorry to say that things haven’t improved much in the last eight years (that’s a joke).

Between all the fixer-uppers I saw as a Realtor, the ones I worked on as a contractor, and the one I live in now, I have some stories. There’s a lot that can go wrong with fixer-uppers, and a lot of the stories come down to owners not being fully prepared for what it means to buy a home that needs so much work. Let’s talk about some little known surprises that can turn your project home into a money pit.

Surprise No. 1: Simply not budgeting

This one doesn’t really come as a surprise until you’re too deep in and realize you’ve got 10 gallons of house to fix with five gallons worth of funding. Sadly, it happens far too often to people who really have a vision and a lot of hope, but terrible planning skills.

If you’re gonna DIY your home, you’ve also got to DIY your construction plan. You can’t simply buy a light fixture because you like it; it has to be within your lighting budget. Tour home improvement stores, build your budget, and stick to it. You have the advantage of time when it comes to those fancy fixtures you like — you can always wait for a sale if that will get them in range.

There’s a way to head this one off at the pass, and that’s by making a budget from day one, just like a professional remodeler would do, as well as figuring extra in for the unforeseen (my dad always said to add about 20% to your materials costs’ estimate, and that hasn’t steered me wrong yet).

While you won’t necessarily need a budget to borrow against your home’s equity via one of the best mortgage lenders, you will need it to get successfully from one end of the project to the other.

Surprise No. 2: Water infiltration

Discovering a leak is one of the fastest ways to blow your fixer-upper project into a million tiny pieces. Although your home inspector would have checked for water in the common spots, like under sinks, under the house, and near appliances, they can’t always tell if there’s water running off your roof and into the wall, for example.

Your insurance won’t cover this kind of repair unless it’s caused by a sudden storm ripping the roof off or an appliance exploding violently in the night, so probably, this one is on you. A second mortgage, like a home equity loan, can help cover the cost if the damage is extensive, but often these problems are a matter of doing the tedious work of tracking the leak down and sealing it.

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Case in point: I recently discovered a leak in a small section of wall in my kitchen coming in from the top of the window. The roof didn’t have an adequate drip edge, which allowed water to slip in behind the siding, eventually leading to water pooling on top of the window and seeping in. I fixed the source of the leak and the spot damage on the sheathing of my house, and then wrapped it with sheet foam and house wrap, just to be on the safe side.

It doesn’t leak anymore. But if I had let it go rather than acting promptly, that water could have destroyed the wall, filled my house with mold, and made my home less of a fixer-upper and more of teardown. All in all, the repair cost me about $700 in materials and a couple weekends of work — but I got a new hammer out of the deal, so it wasn’t all bad.

Surprise No. 3: Electrical mish-mash

Although fewer people are brave enough to do their own electrical work, it happens, and when you’re looking at fixer-uppers, it has already happened more than you might think. When you’re touring homes, watch for outdated electrical systems, since these can interfere with your ability to afford homeowners insurance, if you can get it at all.

My house had two fuse boxes when I bought it, and there were a couple of random breakers kind of next to them for added chaos. It was pretty obvious that I would have to upgrade the electrical system almost immediately, but often it’s your home inspector who finds the issues that are more serious.

Once electrical issues are located during a home inspection, your best bet is to negotiate with the seller to have them corrected immediately. According to Angi, it can cost up to $2,000 to replace a fuse box or upgrade your breaker panel to 200 amps (which is the modern standard for most homes). But rewiring may run between $500 and $4,500, depending on the difficulty and how extensive the issue is. This is why it’s a good idea to invite an electrician over to see your house during your inspection period and give you a quote if you even suspect you may have to redo the wiring.

Fixer-uppers are full of surprises

Along with potentially being full of mice or cockroaches, fixer-upper homes can also be full of the unknown for the people who buy them. Having a huge project can be fun in concept, but you have to be prepared for any and all eventualities. This includes a lot of really stressful surprises — including ones you create for yourself by not budgeting properly for the mission you’re about to undertake.

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The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Discover Financial Services is an advertising partner of The Ascent, a Motley Fool company. Kristi Waterworth has no position in any of the stocks mentioned. The Motley Fool recommends Discover Financial Services. The Motley Fool has a disclosure policy.

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