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| The Money Pit |
A dark legend in the world of real estate, the monster in the
closet, the secret fear of all investors. Why do we do it?
Why do we pour time and money, blood, sweat and tears, into a
home renovation when the house turns out to be the equivalent of
a lemon on the car lot?
Maybe it's because Americans love a challenge. Maybe it's
because we're uneducated about what we're getting ourselves
into, and too proud to stop when we figure it out. Or maybe it's
a secret emotional attachment to the roofs over our heads that
leads us to take on these houses that just won't cooperate.
Some people are getting smart. In fact, there's a whole business
devoted to those who want to weed |
out the lemons, and they're
ruthless about it when they get going. Professional house
flippers, who renovate strictly for resale value and for profit,
have learned how to take emotion out of the process. As soon as
a professional house flipper sees signs of a money pit, they're
liable to bail, cut their losses, and call in the demo team.
But it's not the professionals that are getting in over their
heads. The susceptible ones are those buying the Victorian on
the corner that caught their eye. As far as they're concerned,
it just needs a little TLC. Even if it does have a condemned
sign across the front door.
Real estate has always been an American passion, but lately,
with a |
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huge boom in the market and an even larger boom in home
renovation shows on television, we've become more and more
obsessed with our homes. Maybe it's this starry-eyed view on
renovation, brought on by television shows where a house can be
demolished and rebuilt in the course of a weekend that is
causing the problems.
Hidden problems are common in old and defective properties, but
smart investors generally hire home inspectors who tell them
what might be going on before they even sign the contract. If it
looks like too much, they back out. It's the private investors,
the people determined to own a renovated classic that get into
trouble. And that's not to say they don't hire inspectors. |
It
just means they might not listen to them.
If you purchase a money pit, the results could be disastrous. It
could involve crews of grim men with water vacuums and boards
and ladders. It could involve far more cash than you'll ever
gain back on the market if you decide to sell the thing.
On the other hand, if you have the resources for it, refusing to
back down when your house strikes back could be half the fun.
About the author:
Kirsten Hawkins is a real estate expert from Nashville, TN.
Visit http://www.king-of-real-estate.com/ for more information
on real estate, mortgages, and finding the house of your dream.
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