Buying a fixer-upper property: 7 things every investor should check

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So says Arnold Maritz, co-principal for Lew Geffen Sotheby’s International Realty in Cape Town’s Southern Suburbs, adding that it’s especially important for first-time investors to go in with their eyes wide open.

“Do your homework thoroughly, researching the markets in various areas and look for neighbourhoods where there’s been an upswing, but which still have potential for considerable growth. Also be mindful of location and proximity to amenities and transport routes.

“Once you’ve found a potential project, it’s essential to conduct a thorough inspection before purchase to get an idea of just how deep its issues run. Document everything thoroughly with photos and notes that contractors can reference.

"Don’t be swayed by emotion and overlook or skip any part of the inspection because you’ve fallen in love with a property and think you can overcome any problems that might arise because, chances are, that way lies months of stress and potential bankruptcy.”

Maritz advises that it’s essential to check these seven factors before signing on the dotted line for a fixer-upper:

1. Structural Integrity

The first thing to assess when buying a fixer-upper is the home’s structural integrity. Major structural issues can be expensive to fix and, if left unchecked, can lead to safety hazards. Be on the lookout for large cracks in the foundation, uneven floors, sagging ceilings or gaps in door and window frames.

Hiring a structural engineer to inspect the property is a worthwhile investment as they can identify any foundational problems that might not be immediately visible, giving you an accurate idea of what you’re getting into.

If structural problems are found, consult with a contractor to estimate repair costs before proceeding.

2. Roof condition

A home’s roof is one of its most critical components and replacing a roof can be a costly project, so you’ll want to carefully inspect it before buying. Look for missing, cracked or curling shingles, as well as signs of water damage in the attic or ceilings. Water stains or leaks could indicate a roof nearing the end of its life.

If the roof is older than 15 to 20 years, there’s a good chance you’ll need to replace it soon, so factor that into your budget and ask the current homeowner if there are any warranties or guarantees on the roof that can be transferred to you.

3. Plumbing and electrical systems

Fixer-upper homes often have outdated plumbing and electrical systems, which can pose serious safety risks or lead to expensive repairs.

For plumbing, check for leaks, rusty pipes, low water pressure, or slow drainage. If the house still has lead or galvanized steel pipes, you may need to budget for replacing the entire system. Problem plumbing can be misdiagnosed; for instance, slow draining is often assumed to be a simple clog, but it can actually indicate a more serious and expensive problem.

Similarly, electrical systems that are not correctly installed can be dangerous and won’t pass inspection for compliance. Check for outdated fuse boxes, exposed wiring or frequent power outages. A home inspector should evaluate both systems to ensure they are functioning correctly and meet modern safety standards.

Bring in licensed professionals to inspect the plumbing and electrical systems if you notice any red flags.

4. Windows and doors

Old windows and doors can contribute to significant energy loss, leading to higher utility bills and discomfort in the home. Inspect windows for broken glass and drafts.

Similarly, ensure the doors open and close properly, and check for drafts around door frames. While replacing doors is generally less expensive than replacing windows, old or damaged doors can also affect energy efficiency and security.

5. Water damage and mould

Water damage can lead to a host of problems, including mould, structural damage and poor air quality and if the damage is already extensive, it can be costly to repair. Common signs of water damage include stains on the walls or ceilings, musty odours, warped floors and peeling paint.

Check the basement and ceiling space carefully for signs of past flooding or leaks and ensure there is no standing water in crawl spaces. Mould can also be hazardous to health, so any signs of mould growth should be addressed before finalising the purchase.

6. The potential for improvement

You might have ambitious plans for transforming the property, but you must assess their feasibility and ascertain whether you would have the space, structure and layout potential to accomplish all your plans.

Does the property have enough room to make the layout changes you envisage or even to extend? Also consider whether some of your ideas might be too grand by comparing your plans with other homes in the area. Every neighbourhood has a ceiling price and no matter how lovely the finished product will be, it’s no use going to all the effort if you can’t recoup your renovation costs.

Also, for the best return on your investment (ROI), you need to know what home improvements will add most value to your house, so a little more homework is required here too.

7. Zoning and plans

Before you commit to buying a fixer-upper, check the property’s zoning regulations and if any plans are required for renovations. Zoning laws dictate how the property can be used and may restrict additions, new construction, or other modifications you plan to make.

Also, some fixer-uppers may have had unpermitted renovations in the past, which can complicate your investment. If the property has unpermitted work, you may be responsible for getting the ‘as built’ plans drawn up and approved, which can be costly. It’s a good idea to contact your local council and request the property's existing plans to avoid any surprises down the road.

For many, part of the appeal of fixing up a house lies in a desire to get stuck in and 'do it yourself' to create something truly bespoke and the DIY route can certainly save you money as well as develop your home-improvement skills.

However, Maritz cautions that you need to be mindful of the fact that this approach will inevitably take longer and if you overestimate your capabilities, you may need to pay a professional to finish what you’ve started or fix your mistakes.

‘It's critical to realistically evaluate your own skills and tolerances. And if it’s your first attempt at a large renovation project and you’ve little handyman experience, it’s probably a good idea to hire professionals for the more complex jobs while you tackle the smaller ones where errors won’t be so costly.”

Purchasing a fixer-upper can be a smart investment, but it requires careful consideration and due diligence.

“By thoroughly inspecting the property you can avoid costly surprises and make an informed decision,” concludes Maritz.

“If you’re prepared for unexpected challenges, with the right preparation and a solid renovation plan, a fixer-upper can be transformed into a valuable property that generates a significant return on investment.”