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5 Questions to Ask Before You Buy That Fixer-Upper in New York City

From what kind of problems are fixable to how to assess your own renovation skills, a step-by-step model for identifying which wrecks are worth it and which aren't

The New York City real-estate market can be tricky to navigate. From co-ops and condos to townhomes and brownstones, the Big Apple has been building (and rebuilding) residential housing practically since the Dutch arrived in 1609. Among all of this construction, potential buyers will find properties demurely labeled as “fixer-uppers.” That category can cut a wide swath, depending on the real-estate agent’s definition of the term, ranging from structures begging to be condemned to those whose “problems” are mostly cosmetic. It pays to know, as Kenny Rogers might say, when to hold ’em and when to fold ’em, especially when it comes to making one of the biggest purchases of your life. To make it easier, we have outlined five steps to help you decide whether you can handle a fixer-upper, or if you’re better off buying something that’s more or less move-in ready.

1. What needs to be fixed?

Before you fall in love with a place, make sure that you get an accurate and comprehensive accounting of what needs to be fixed. A good Realtor will be able to tell you basic information, like when the water heater and air conditioning were last replaced, but other issues are not so easy to discern. And to find those, it’s essential to get a good home inspector, preferably someone not recommended by the real estate agent (you never know what sort of deals or affiliations they have worked out). Angie Hicks, founder of Angie’s List, an online repository of contractors, electricians and other home-improvement services (like Yelp but for home repairs), says that shelling out a few hundred dollars for a home inspection is essential. “It will be money well spent,” she says, “especially if an expensive repair is revealed.”

A good home inspector will thoroughly inspect all areas of the house, from things you can see (a dishwasher circa 1972) to things that are largely invisible (asbestos, lead paint or corroded plumbing). Generally speaking, the following areas are ones that need inspection and determination of whether they are safe — and, if not, whether the safety issue needs resolution before you move in — as well as whether they’ll last much longer:

Structure: If the ceiling is cracking or the foundation is shifting, that can be a big deal. Anything structural has the potential to be extremely costly. “Unless you have unlimited funds, or the home has great historic value, pass on fixing homes with major structural issues,” say the home experts at “Hire a structural engineer and roofer to make a formal inspection of your potential fixer. The inspection fees are nominal compared with the major repair costs you might be hit with.”

Roof: If you’re buying a co-op or condo, your monthly maintenance fees should cover repairs, but you’ll want to find out what those fees are and whether you’ll be socked with additional fees if an update is in the works. For brownstones or other free-standing homes, you’ll want to know when the roof was last repaired. Roofs will generally last 20 to 30 years, but leaks can crop up at any time, so make sure it’s solid. Repairs can range from adding a few shingles to having to replace the entire roof (including wood and insulation), according to Chris Cudmore at the crowd-sourced Q&A website

Foundation: Again, unless you’re buying a free-standing building this won’t apply. But if you are, take a good look at the foundation including whether the home is properly graded or has flooding issues (a good inspector will find tell-tale signs in the basement or crawlspace) and whether there are any cracks or other crumbling structures. says serious foundation issues are usually a big enough problem that you should pass on the property, with one exception. “If you find a parcel priced only on the value of the land, but the property also features a house fixer with foundation damage, it might be worth lifting the house off the foundation and doing major foundation repair,” the site’s experts suggest. “Selecting a market-priced renovation requiring this level of repair, however, typically won’t be worth your efforts.”

Electrical: If you’re looking for bargains, electrical work is probably a given according to Cudmore. You’ll need to know if the home is properly wired and whether it offers enough power. Some older buildings, for example, might not have the circuitry needed to power today’s appliances and electronics, and the last thing you want is to be replacing fuses every time you turn on your hair dryer while your air conditioner is running.

Plumbing: A good inspector will be able to locate any corroded pipes, silent leaks, low water pressure and other plumbing issues. Make sure to be on the lookout for mold, too, which is notoriously difficult to eradicate once it’s progressed into the walls, and it can cause structural damage in turn. “If the moisture damage has been neglected or gone unnoticed for long, you’re likely to find rot,” says

HVAC: Unlike when the Dutch made camp in Manhattan 400 years ago, heating and air conditioning are considered essentials, and you’ll want to know when each system was last replaced. A furnace will last about 20 to 30 years, and air-conditioning (depending on whether it’s central air or window units) may fail considerably sooner.

Doors and windows: Windows and doors have variable life spans, but you’ll want to make sure they are safe, solid, and don’t allow in unwanted elements (or, in the case of doors, unwanted visitors). And while windows aren’t necessarily expensive, they are difficult to install yourself.

Once you have a comprehensive list of what needs to be fixed and/or remodeled – both to make the space livable and designed to your individual needs — you’ll likely have one of two reactions: abject fear or excitement at the prospects ahead. In either case, read ahead to find out how to determine whether the fixer-upper you’ve found should become your fixer-upper.

fixer upper

(Photo: iStockphoto)

2. What are you capable of, both financially and physically?

Jen Miller from points out the obvious: “fixer-uppers are time drains, and they disrupt your life.” But she also offers advice on how to decide whether the disruption is worth the hassle. If you have an alternate place to stay while the work is being done or can continue to rent and pay the mortgage on a new place, the disruption won’t be a big issue,” she says. “Of course, if you’re a DIY diehard and love the process of turning one thing into another, then the disruption might not bother you as much as someone who likes things neat and clean and finished.”

You’ll also need to be honest with yourself about how much time you actually have available. If you’re already overwhelmed with family and work responsibilities, then chances are slim you’ll be able to fit in any DIY renovations into your schedule, which means hiring a contractor and any number of other professionals to help navigate the process for you.

For some repairs, you’ll need to get a professional involved (unless you’re a carpenter, plumber, electrician, or architect already, in which case, go to town). Make a list of your own skill set to assess your DIY limitations: if you can do basic decorating (painting, wallpaper, replacing cabinets, laying down carpeting) and know how to use a screwdriver and a drill, a lot of kitchen and bathroom renovations are likely not going to require a professional. But electrical repairs, for example, or serious plumbing issues may be out of your league. In some instances you may even need to get a permit saying a licensed professional is on the case — this is especially true in co-op situations, where the co-op board isn’t too keen on unlicensed people making electrical or plumbing repairs. A site such as Angie’s List is an excellent place to find professionals, and you can read reviews on their past work to know exactly what you’re getting

At this stage you’ll also want to be honest as to how much you can afford to spend on renovations. If you’re using all of your savings just to make the down payment and pay other mortgage costs, then a fixer-upper may not be for you (unless the place is habitable already and you can pay-as-you-go when it comes to making repairs). But if you have a set budget in mind — say, $30,000 over the cost of the mortgage itself ­– then you can move forward in deciding the best course of action.

3. How much will the renovations cost?

By now you know what you’ll need to do to turn your fixer-upper into a livable space, including a detailed list of the exact repairs that are needed to make your home safe and habitable from a home inspector. From here, the research begins, and it’s essential to be honest with yourself and realistic about your costs, something many rehabbers find difficult.

“If you know what it will cost to fix up the house, then you are in a wonderful position,” says David Lupberger, a columnist for Qualified Remodeler magazine and a renovation consultant. “Unfortunately, people underestimate their costs.”

To avoid such mistakes, be meticulous in your estimating process. For the repairs you’ve determined that you can do yourself, head to your local hardware store and locate materials and get costs. Many hardware stores also offer DIY classes, so it’s worth seeing if they have any upcoming lessons in skills you know you’ll need. You can also find DIY guides online (,, etc.) where the lists of supplies and tools needed for individual projects are comprehensive and based on experts’ experiences.

If you need the help of professionals, get estimates from them about the work they’ll be doing. It helps to get estimates from two or three people, and make sure you get the estimates in writing with specific details about what is and is not included in the costs.

In any case, once you come up with your total costs for both DIY work and professional services, you’re not done. Lupberger suggests adding 20 percent to account for unwanted surprises or up to 40 percent if you are dealing with lead-paint or asbestos removal (or other more relatively unpredictable and time-intensive repairs).

Once you’ve come up with a repair costs and added your 20 to 40 percent cushion, sit down and start crunching numbers. As an example, let’s say you find a condo for $350,000 and the estimates for all repairs (plus that 30 percent) come to an additional $75,000. Your price is now $425,000, which means you’ll need to figure out a few things.

Fixer upper hammer

(Photo: iStockphoto)

4. Is the cost of the house at or below market rate for comparable properties in the area?

First, is that $425,000 price above or below market rate for comparable properties in the area? (Your Realtor can help you find comparables, which are nearby housing units of the size and in the same condition) If after renovations your investment in the property will be more than the property is worth, that’s not a great position to be in, unless you’re willing to wait around for a decade or more for real estate prices to rise. It’s even worse if comparables in the area are less expensive than your total cost, as this means that if you are planning to sell your property you’ll be competing with other more economical properties.

5. Can you negotiate on the purchase price?

Second, can you negotiate on the purchase price? Some buyers are eager to sell and will offer allowances for certain repairs (often the ones for routine repairs, like roofs, hot water heaters, windows and air conditioning systems) or replacements (of appliances, flooring or lighting fixtures). If you’ve found more expensive repairs that need to be made, the seller may be willing to bring the price down. If you can negotiate a $25,000 discount, your total price drops to $400,000 and things are looking up.

Keep all of this in mind if you decide to make an offer, since the seller will likely need proof of the necessary repairs and estimates to be convinced that a price reduction is in order. But a good rule of thumb is to figure out how much the home will be worth once renovations are finished, which your Realtor can help you determine, and subtract the cost of making those repairs to come up with your offer price.

6. Can you afford the opportunity costs that come with a fixer upper?”

Remember that in addition to monetary costs, there are also opportunity costs ­– and the aforementioned frustrations — that come with buying a fixer-upper.’s Miller says people often don’t take into account certain disruptions, such as child care, pet care, takeout food and vacation days from work, when they are thinking about renovations. And fixer-uppers can take a toll on relationships, too. Ilona Bray, author of Nolo’s Essential Guide to Buying Your First Home, says first-time buyers are especially prone to getting stressed out. “A lot of people move into houses soon after they’ve entered a long-term relationship,” she says. “That can be tough if you’re trying to figure out difficult things that have big implications for your finances and how you want to spend your life.”

Finally, don’t become so focused on finding a fixer-upper that you discount move-in-ready spaces. If you’ll be spending $425,000 and months of your life (plus hours of manpower or, at best, stressful communication with contractors and professionals) to fix up a place but can find something that needs little to no repairs or renovation within the same price range, it may be worth foregoing the hassles of DIY. Ask yourself if the elbow grease is worth it or if you’d rather move in and start relaxing instead of hammering.

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