Aurel Garban - Unlimited Sotheby's International Realty


If you’re buying a fixer upper, whether you plan to live on the property or flip it, there are plenty of things that you’ll need to consider. So you can budget appropriately, below, many of the costs and fees are laid to so that you can see what you’ll need to budget for when rehabilitating a home.



The Overall Costs


The costs that you’ll incur in buying and finishing a home that needs to be rehabilitated are as follows:


  • The team needed for rehabilitation
  • The purchase price of the property
  • The cost of owning the property
  • The cost of selling the property (if you plan on flipping the home)


The Team


The people that you put together to rehab your home will be very important to the entire rehabilitation process. You should take the time to research each person that you’re hiring to be sure that they are a good fit for the job.


Professionals who will be involved in the process include:


  • Lender
  • Attorney
  • Realtor
  • Contractor 
  • Insurance agent
  • Home inspector


You can ask your realtor or other trusted contacts for recommendations. Putting a team in place helps to make the entire, sometimes cumbersome process of house rehabilitation a bit smoother. 


Buying The Property


These costs are pretty standard as if you were buying any other home. You’ll need to pay closing costs, attorneys fees, realtor fees, and more. Costs typically included in a home purchase are:


  • Inspection
  • Purchase price
  • Closing costs
  • Appraisal


You should budget for all of these typical home buying costs when buying a rehab home. 


The Costs Of Home Rehabilitation


This is where things get expensive. You’ll need to first pay a contractor just to consult with them to see how they will create your vision for the property. You could also take another route an consult with a home inspector who has experience in construction. They can give you an idea of what the construction expense will be and what needs to be addressed. 


When you do get to meet with contractors, you’ll want to understand their construction experience and feel comfortable that they can produce the work that you need at a high level of quality.  


Owning A Home


Once you have the home in need of rehabilitation in your possession, you’ll need to pay the typical costs of any homeowner. These include:


  • Mortgage payments
  • Taxes
  • Insurance
  • Utilities
  • Maintenance


Even if you’re not currently occupying the home, once the property is purchased, all of these costs will need to be covered and considered. 


If you decide to flip the property and sell it, you’ll need to consider additional costs including realtor’s fees and other closing costs.  


This Multi-Family in Cambridge, MA recently sold for $1,870,000. This style home was sold by Aurel Garban - Unlimited Sotheby's International Realty.


466 Putnam Ave, Cambridge, MA 02139

Multi-Family

$1,700,000
Price
$1,870,000
Sale Price

2
Units
3,070
Approx. GLA
Don't wait! 466 Putnam Avenue is a wonderful Cambridgeport residence with everything you need and more, on a large lot with a two-car garage. On the second and third floors is a large owner's unit with plenty of space--light and airy, numerous updates, and still room for customizing. Open plan living/dining area has lots of flexibility for the perfect layout. On the first floor is a large one-bed unit that could remain an income property or a private guest suite, or it could be integrated with the rest of the house to create a large single-family residence. Outside is a lovely garden area, with a gravel patio and a paved drive. Recent updates include most of the roof, both heating systems, electrical, and a new garage door. From the front door, it's not far to Trader Joe's, Whole Foods, and the beautiful 17 acres of Magazine Beach Park on the Charles River.

Similar Properties



Image by Gerd Altmann from Pixabay

So what will 2020 bring to the real estate market? While market trends can, and do, change on a whim, some activity seems to be easier to predict. If you’re entering the market this year as a buyer or seller, having a better understanding of these trends will help you make informed decisions, so here’s what you can expect.

1. Home Prices Rise, but Slower

Home prices have been on the rise in the past couple of years. This trend is expected to continue in 2020, but the rise will be a bit slower. Freddie Mac warns of an economic slowdown this year, and expects price growth to be around 2.8, compared to 3.3 in 2019 and 5.0 in 2018. This is good news for sellers, but it’s also good news for those who aren't considering selling this year. Rising home prices means your equity will increase or hold steady.

2. Drop in Mortgage Rates

Next, interest rates are expected to drop for most loan types. In 2020, expect to see averages below four percent for most types of loans. Of course, this particular trend can change suddenly, but if it remains on track it will mean more interested buyers in the market. This can help sellers.

3. Homebuilders Focusing on Starter Homes

Demand for starter homes is on the increase. There are two reasons for this. First, many people who would normally be listing their starter homes are choosing to stay put, because younger homeowners are valuing community more than owning a large home. Second, Baby Boomers are starting to look for smaller “starter” homes as their downsized homes. This creates an additional number of buyers competing for the type of home that appeals to first-time buyers. Because of this demand, many homebuilders are focusing on building in this demographic.

4. Millennials Dominating the Market

Millennials, those born between 1980 and 1998, are going to be the largest generational group in the home buying market. Many of these young adults waited to buy their first home until they were well established in their careers, and are now ready to make the purchase. Others are ready to move out of their starter home and into their forever home. These buyers use the Internet primarily to help them in their home search and are looking for the home’s location and features, rather than a huge home with lots of square footage.

Market trends are never set in stone. Economic factors can change and impact these trends, but based on current projections, these are a good indication of what the 2020 home market will bring.



4 Brattle, Cambridge, MA 02138

Rental

$7,500
Price

10
Rooms
3
Beds
3/1
Full/Half Baths
This pristine Brattle Circle townhome is a gorgeous, custom design in Cambridge’s best location. Located in a private cul-de-sac, this home has 4 floors of living and feels like a single family. 3 plus bedrooms and 3 plus bathrooms span across this nearly 2000 sqft home. The first floor hosts an open floor plan hosting an elegant dining and modern kitchen, as well as a well-lit living room with a gas fireplace. The 2nd floor hosts the master suite with a luxurious en-suite master bath, and an office space. Floor 3 has a spacious bedroom with 3 beautiful skylights and an en-suite bath. A beautiful patio area perfect for enjoying Cambridge’s beauty, as well as stunning front courtyard.
Open House
No scheduled Open Houses

Similar Properties




466 Putnam Ave, Cambridge, MA 02139

Condo

$2,550,000
Price

9
Rooms
4
Beds
4/1
Full/Half Baths
Welcome Putnam Ave’s upcoming townhouse residences! This is a one of a kind opportunity to own a luxury, 4 level townhouse in an amazing location. 2600+ sqft spreads across a modern, open floor plan that begins in the foyer, and extends to a thoughtfully done dining room. The luxurious kitchen and waterfall island centers the home, leading to an entertainer's living room with access to a massive deck. Floor 2 hosts a marvelous master bedroom featuring double walk-in closets, 2 linen closets, master bathroom, as well as a 2nd bedroom + en-suite bathroom. The top floor hosts 2 large bedrooms, and a double-vanity bathroom. The finished lower level has ample living space for leisure and recreation. An 800+ sqft private garden and 2 parking (1 garage) are included. Layout is tentative, buyer’s welcome to add design input. Excellent proximity to fun Cambridge food markets, quaint stores, and iconic Magazine Beach Park which overlooks the Charles River. To be completed by mid 2021.
Open House
No scheduled Open Houses

Similar Properties





Loading