Eight Subtle Signs You’re About to Buy a Money Pit
Buying a home is one of the most important financial decisions you’ll make in life: home equity makes up nearly a third of people’s net worth , making it by far the biggest piece of their financial puzzle. People who own a home are also richer than those who continue to rent , so it’s no surprise that home ownership remains a key goal for many people.
Of course, houses are expensive too, which forces many people to look for bargains. While buying a fixer-upper doesn’t guarantee you’ll actually save money—and homes come with a ton of hidden costs that you can’t always predict or account for —if you’re a handy person who can do a lot of work. For yourself, buying a cheap home that needs renovation can be a realistic financial decision.
Unless you buy a money pit. The difference between a fixer and a money pit is typically large: a fixer has certain problems that you can fix. A money pit is a black hole that sucks all the money out of your wallet and the sanity out of your soul.
Signs You’re About to Buy a Money Pit
Identifying a money pit is sometimes obvious—list the house as-is , visible cracks in the foundation, mold everywhere—but sometimes the signs that you’re about to ruin your life with a home purchase are much more subtle. Here’s what to look for:
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Bad air. All homes have a distinct ” homey ” smell that may seem foreign to you when you first walk in, but there’s a big difference between a homey smell and, you know, a stink . A fishy or smoky smell may indicate electrical problems; Rotten eggs may indicate a gas leak; and a damp, musty smell could mean there’s mold hiding behind the fresh paint.
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Rust. A lot of things can be hidden with paint and a quick cosmetic job, but rust is harder to hide or remove. If you notice rusty appliances and/or pipes in the kitchen and bathrooms, as well as rusty nails or screws, you may be looking at a home with moisture problems that will be expensive to fix.
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Windows and doors are sealed. If you can’t open the windows easily or all the doors are stuck, you at least need to have your foundation thoroughly inspected—this could be a sign that the home is in need of foundation repairs, which could be costly . Another sign that a home may have foundation problems is a simple lack of right angles or level surfaces: If every floor slopes, every wall is convex, and every angle is greater or less than 90 degrees, it’s time to wobble.
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Low water pressure. Is water not flowing from the taps? There are many costly causes of low water pressure that you should worry about. More importantly, low water pressure is a quality of life issue, and if the previous owners did not correct it, that in itself means it is an expensive and complex problem.
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Dropped ceilings. Of course, there are several legitimate reasons why someone might install a false ceiling in their home. But they’re also often used as an affordable way to hide problems—like a water-damaged ceiling, crumbling old plaster, or poor wiring and plumbing work.
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Outdated wiring. If your home has two-prong outlets instead of the more modern grounded outlets, you may have to rewire your entire home, which could cost up to $30,000 . It’s time to call an electrician to give you an idea of what you’re getting yourself into.
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Insect traps are everywhere. Everyone experiences an infestation from time to time, and it’s not uncommon to see ant traps in the spring even in spotlessly clean and well-kept homes. But if you see a lot of traps and new traps placed on top of old ones, this could indicate an infestation or the current owners have confused termites with ants .
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Lack of service. It’s one thing if the top lock needs some work. This is another case where critical aspects of a home’s infrastructure have been clearly and blatantly ignored, such as an old roof with missing shingles, dirty HVAC vents, or a rusty water heater that is past its expiration date. These are signs that the house is full of problems that have not yet developed into a crisis. Just because there are no obvious leaks or other problems today doesn’t mean there won’t be tomorrow, especially if the current owner hasn’t bothered to perform basic maintenance on the home. You don’t want all these pending problems to become yours.