How I Turned My Starter Home Into a Profitable Fixer-Upper

It wasn't our forever home, but it turned out to be just what we needed.

When I was a renter, I enjoyed watching those house-flipping shows on TV and seeing the transformations that took place. It was so appealing to think of taking a space and shaping it to suit your personal taste. But as much as I enjoyed those shows, I never thought the first house I bought would be a fixer-upper. So much for planning!

I've written before about the process of buying my first home, so consider this Part Two of the story. My boyfriend (now husband) and I were looking for a place of our own, knowing it would be a starter home. What we didn't know was how soon we'd be moving out, and the profit we'd end up making on that house. Here's a look at how it happened.

Going in with a plan we could afford

We were able to find a house that was well within our budget, which meant we didn't have to stretch to pay the mortgage each month. But since we were living in such an expensive part of the country, an "affordable" house meant a house that needed work. We knew that going in, so we were able to budget the cost of remodeling into our plan.

We also knew, after viewing the house several times and having a thorough inspection done, the bones of the home were solid. I was glad for that, because it's not nearly as fun to plunk down thousands of dollars for a new roof or windows or plumbing as it is for the design elements you'll see every day. We also didn't have plans to move any walls or add square footage, so going in, we knew our expenses would be lower than what they would have been for a gutting job.

Finding the right contractor

Our first big step after moving in and eating celebratory burritos on camping chairs in the empty living room was finding a good contractor. We searched around online and took a few recommendations before meeting with three who seemed promising -- and it was almost comical how easy it was to choose. The first didn't seem to care too much since our project would be small by his company's standards. The second decided to include a ton of extra work in his quote that we didn't ask for, skyrocketing the price. (Tearing out and redoing all the insulation, just because? No thank you.)

The third contractor was kind, understanding that we were first-time homeowners with a lot of questions, and ran a small company, which meant we'd get a lot of his personal attention. Oh, and his price was the lowest by a significant amount. Bingo.

We discussed our plans, worked out a price, and signed the contract. All of a sudden, we were living in a construction zone.

Doing as much as we could ourselves

It's probably not much of a surprise that our six-week plan turned into a three-month reality, because that seems to be the case for just about every renovation you hear about. But to help things move along and save some money (and to feel more involved in our new home), we tried to do some of the work ourselves where we could.

We pulled out part of the kitchen cabinets that we knew we weren't keeping. We went to the tile shops and big-box hardware stores and appliance stores to pick out and purchase just about everything that would go in the house. We tore down a pergola and a garden shed and redid all of the plants in the garden. We left all of the big pieces to the construction team, but these small contributions still made a difference. And little by little, it was transforming from a house we bought to our own home.

Moving in, moving out

We had picked out all the finishes in the house with our own tastes in mind, but also with the idea that someday we would be selling the house. We wanted it to appeal to future buyers, too. And I'm so glad we did, because, sooner than we ever thought, we were ready to leave the Bay Area and move across the country. Almost exactly two years after we bought the house, we put it back on the market.

We had kept careful records of every improvement we made during our renovation. This was helpful not just as a sales tool to show potential buyers, but as a way for us to track the real cost of our first homeownership experience. And because it's the Bay Area, housing prices had continued to climb over those two years, even in the city we were in, almost 20 miles from San Francisco. Those rising prices combined with the work we did to spruce up the house meant we were able to sell it for a significant amount more than we paid for it, even accounting for closing costs, interest on the mortgage, and the renovation.

It may not have been the same story if we'd bought a move-in ready house from the get-go, or if we'd picked a property that needed a ton of major repairs. But because we found a place that we knew we could afford and budgeted for the improvements so we didn't have to take on debt, we ended up walking away with a generous profit.

It wasn't easy, and it wasn't our dream home, but it was exactly the right house for us at that time in our lives.