I often hear the phrase "I want to find a fixer-upper" here at the shore, and sometimes I CAN find sellers who are willing to offer a lower than average sales price to sell a home "as is" instead of paying for the repairs themselves... but you really need to know exactly what you're getting into before buying.

It's commonly believed that fixer-upper properties represent easy money that is ripe for the taking - that you can buy it, do a little work on it in your spare time, and then resell quickly for a large profit. This usually isn't the case in the Jersey Shores area, but with proper planning and foresight, good profits can be made by buying older properties in serious need of updating, making appropriate improvements and repairs (or even rebuilding), and then reselling, whether quickly or after you have enjoyed the home for your own use for a time.

For many first time buyers who intend to live in the house while working on it, buying a fixer-upper can be the very best option. It's less risky buying a fixer-upper when you can live in the house while fixing it, since you avoid the cost of living elsewhere and encurring two sets of homeowner expenses. And of course, by living in the house for at least 24 months you should be able to avoid paying regular income taxes on the profits.

The most important thing to know before making a decision on such a purchase is what needs to be fixed, both to pass Code requirements and for the comfort of your wallet. Any time you consider spending money on improving a home, strive to spend your money on things important to the quality of life and on things that buyers can easily see. Heating systems, air conditioning, kitchens and bathrooms add to the appeal and comfort of a home, both now and during resale. Things like a bit of landscaping, new paint and removing trash from the property cost little but have instant impact on that important consideration of "curb appeal" and will turn neighbors into friends.

Houses that have only cosmetic problems like peeling paint, a trashy yard, bad carpet or old-fashioned, peeling wallpaper are your best bet; fixing and cleaning cosmetic issues is fairly easy and inexpensive. Kitchen and bathroom remodeling usually pays a nice return. Even moving a wall or two and replacing windows can greatly modernize a home and add substantial appeal, while still keeping within a budget. Dont be afraid of buying a fixer-upper in need of this kind of repair!

Properties with structural damage, or a floor plan that requires major work to remedy, usually cant be "fixed up" at a profit and might need to be torn down and rebuilt. Rebuilding is a valid option and quite popular on the island, where land will always be at a premium and someone will always value the views and the proximity of ocean or bay.

Always have an inspection for hidden damage performed by a home inspector or construction professional before buying a fixer-upper, or ANY home, for that matter. Make sure that satisfactory completion of such inspections are a condition of purchase in any contract you sign. Be sure to cover how much damage you are willing to accept and at what point you will want the seller to contribute toward repairs... or at what point you will want to walk away. A good attorney (I can always recommend great local attorneys if you don't have one) and a good contract will help protect you here.