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Fixer-Uppers out of FavorMarket Opportunity for Some...With a booming economy and people placing ever higher value on recreation and family time, the interest in "fixer-upper" homes is very limited. Most buyers shrink from submitting a bid on a house if the room colors are not "proper", much less if the bathrooms need updating or the kitchen needs to be re-done.
Houses that need fixing up tend to linger for months on the market... Builders usually buy them, knock them down and build new homes, often the "McMansions" the neighbors all disdain (but buyers love). Builders however are interested in most of these houses purely for their land value, bearing in mind the cost of demolition and the delays imposed by the Town on both demolition and on new construction permits. These delays add substantial interest costs to any project. Differing Degrees of Work, and OpportunitySome of the fixer uppers need only a cosmetic re-do. This often involves removal of all carpeting, sanding and refinishing of all floors, and painting of all walls and ceilings. Not a small undertaking, but not a substantial project either. Often, this work can be subbed out for say, $25,000 or alternatively, done by a hard-working couple themselves working nights with equipment from the rental store.
More difficult are those situations requiring new bathrooms and new kitchens, the major focal point for homebuyers today. These are larger projects which normally eed to be done by professionals, not homeowners, if they are to be done to top of the line quality. Bathrooms run from $10,000 to $20,000 while kitchens can easily run $50,000 to $100,000 for good quality. Cheap quality is seldom recommended unless that is consistent with the neighborhood and you do not expect the neighborhood to "gentrify" with the rest of Fairfield County. (In that case, why buy??) Ranch ConversionsA hold-over from the 1950's is a goodly number of ranch houses -- very functional, but very much out of style these days. Builders will often knock them down, replacing them with colonials. A few smart investors have discovered that a more economical approach is to remove the roof entirely, and add a second floor for the bedrooms. With the added space, they can re-configure the ground floor to the more spacious living and dining rooms sought by buyers today.
While this is a major task, there do exist both architects and builders that specialize in such projects. These folks can show you examples of what they have done lately, and equally, what the economics of such a project are. Smart investors are giving serious consideration to this approach because it minimizes the delays for demolition permits and greatly reduces the permitting risks at Town Hall that they would encounter with new construction. Mead Avenue in CosCob This 1913 cape has both good curb appeal, good location, and good "bones" (i.e. it is well built). Cosmetically, it has been dreadfully ignored.
This house offers 4 BR's and 2 baths, with a total of almost 1,600 sq feet on roughly 1/4 acre. The location is within walking distance of schools and shopping in CosCob, yet still in a quiet neighborhood. The price was reduced from $535,000 to $495,000 recently and taxes are just $3,500 each year. This house needs a complete cosmetic renovation (floors, walls, etc.) as well as a new kitchen and baths. Lots of hard work, but a skilled owner could do most of it and keep the costs to under $100,000 --- thereby making this one great investment. Smith Ridge in New Canaan This is an upscale opportunity for someone with both the money and the patience. White Oak Shade in New Canaan This 1922 farmhouse with a pool is in mint condition and sits on 1 3/4 acres in a nice area, close to Town. While it technically offers 4 BR's, the reality is only 3 BR's for most of us. Further, the kitchen is tiny and cries out for updating.
Offered at $995,000 (and an accepted offer is pending), this house is liveable "as is" and could be easily expanded to make a real fourth BR as well as a great kitchen that all buyers are seeking. This will take time plus $100-150,000 or so. This area is well worth that investment. Dorchester Rd in Riverside This three bedroom ranch on 1/4 acre in a quiet family area, within walking distance of all schools, has been ignored for years and needs updating. The kitchen is too small and needs a complete renovation but space is available in the adjoining mudroom. The list price is $610,000 and renovations will entail $100,000. The neighborhood will easily carry the higher value.
Longer term, the new owners may well remove the roof to put 2-3 bedrooms on the second floor, while reconfiguring the ground floor. Two houses adjoining this one have recently been expanded and renovated this way. Field Road in Riverside This 3-bedroom ranch offers 1,500 sq feet of space in perfect condition, plus 700 feet in a finished basement. The house sits on .34 acres in an upscale neighborhood where a price of $2.0 to $2.5 million could be sustained for the right house.
Going forward, the challenge is to remove the roof and move the bedrooms upstairs, while re-configuring the ground floor. Total sq footage could exceed 4,000 sq feet. The list price today is in the high $800's.
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