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Located on a shady lot, a block away from an elementary school, the quaint century-old Georgian had storybook-like curb appeal.
Inside, however, the house was a disaster. The electrical and plumbing systems were primitive, there was only one antiquated bathroom on the second floor and the secondary bedrooms were the size of walk-in closets, but without closets.
The couple that bought the Georgian made a quick decision: They would gut the house to carve out their dream home inside.
Gut-jobs are becoming more popular as the country's housing stock ages, and as homeowners migrate to established neighborhoods but still crave the modern amenities found in new homes. Also, many people completely change the layout of the house to suit the family of the 21st century.
In certain areas of the country, the gut-job has gone one step further with a trend known the teardown: To purchase a home solely for its location. Once the ink is dry on the sales contract, the house is demolished, making way for a new and usually much grander house at the site.
Buying a gut-job is actually a rather simple, but expensive, process. What you're looking for is the worst house on a good block in a desirable neighborhood. The worst condition the interior is in, the better. That means the house should sell for a lot less -- at least 25 percent less -- than its comparable neighbors.
The downside of a gut-job is the cost. Often, gutting a home and building a new interior is more expensive than building a comparable new home.
Except in those housing markets that are experiencing over-inflation, most homeowners of gut-jobs wouldn't be able to recoup their home investment if they immediately put the house back on the market. What they get for their money is the house they want, in the location they want. |
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When looking for a potential gut-job home, keep the following pointers in mind:
 With a gut-job, it's the outside -- location, aesthetics, the mature trees, curb appeal, and schools -- that counts. Because you're going to change the entire interior, don't get hung up over the numbers of bedrooms and bathrooms.
It helps, however, if the shell of the house, especially the roof and siding, is in good condition. Most folks who do gut-jobs can't resist tweaking the exterior of the house also.
Try to recoup costs by selling off any usable appliances or home parts: doors, wood trim, sinks and even conduit or piping. Ask your agent if there are local companies that can do this for you -- for a part of the profits.
If you plan to add onto the house, spend some time with the local building department. You want to find out the maximum square footage you can build on the property, and what part(s) of the house is deducted from the footage. In some communities, a porch overhang counts as square footage, as does an unfinished basement and attic.
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