Buying a fixer-upper is always a gamble, so if you’re a first-time homebuyer it’s important to know what you’re getting into. Location, the nature and amount of the work needed to rehab the property, and your skill level with tools all factor into it.

The benefits can be significant: the sale price isn’t contingent on the state of the market, and if you’re buying for less than other properties around it, you stand to make a handsome profit once it’s all fixed up. And there’s less competition for a fixer-upper so you don’t have to worry about multiple counteroffers. So if you’re up to the challenge, a fixer-upper can be a good way to go for first-timers.

The right fixer-upper

However, you don’t want to buy the first fixer-upper that comes along. As with any home, location is an important factor. You could turn it into a real showpiece and you’d still have a hard time selling if it’s in an undesirable area. Consult with a realtor who’s familiar with selling fixer-uppers, someone who knows where to look and begin by searching for fixer-uppers in your area (homes for sale in Fort Lauderdale, have a median listing price of $305,000). Configuration also matters as the majority of homebuyers are looking for a three-bedroom with more than one bathroom and a layout that isn’t disjointed and chopped up.

Look carefully at the condition it’s in. Some fixer-uppers may need more work than you’re able or willing to put into it. Serious problems with the foundation, roof or electrical system may or may not be within your ability to correct.

Buying

If this is your first home mortgage, you may have an easier time finding a lender for a fixer-upper than if you were buying a ready-to-move-in property. But the same rules apply: your credit needs to be in good shape, your monthly budget must be able to accommodate a mortgage payment and there are closing costs to consider. Be sure to meet with multiple lenders so you get the lowest interest rate and closing costs possible and have a home inspector give everything a good look. If they find something seriously wrong, like warped floors or damaged plumbing, you may want to think twice about the property.

DIY projects

 There are usually a number of low-impact DIY projects in store for you, jobs you can start with. Painting, stripping wallpaper, patching holes, fixing broken windows and replacing baseboards are within the capabilities of most homeowners. Repainting or refacing kitchen cabinets can be a little more difficult, as can replacing bathroom subflooring damaged by leaky toilets. If doors have become warped, they’ll need to be replaced.

Fixer-uppers often require work on some feature that may involve a contractor, especially for something structural that has to be done right like a damaged roof, or an HVAC system that needs repairing or replacing. Your home inspection should leave you with a clear idea of the magnitude of the task ahead. Don’t forget that you’ll need the right tools for the job. If you don’t have the right power drills, a sander, jigsaw, sledge hammers and screwdrivers, it may be necessary to factor in new tools as an expense.

Stay or sell

Determining whether to stay or sell once you’ve rehabbed a fixer-upper depends on market conditions and your personal plans. If you’ve created the perfect home for you it might make sense to stay. However, if market conditions become favorable, it could be worthwhile to see how much you can get for the property. This is where you’ll reap the real benefits of all that work and good judgment.

If you’re a first-time homebuyer, make sure you understand the buying process and the challenges that come with a fixer-upper before making a commitment of that magnitude. Your finances and credit will need to be in solid condition before approaching a lender and shop around for a home loan. Remember, the less you pay for a fixer-upper, the more you can expect to gain when it’s time to sell.