Buying a home can be overwhelming. Not only is it one of the biggest purchases you will ever make but there are so many things to consider. Do you want a house with a big yard? Do you require a good school close by? The options can seem endless, but one decision you will ultimately have to make is whether you want to buy an older or newer home.

There are positives and negatives for both older and newer homes. A new home has got clean carpet, fresh paint, its move-in ready and has that new house smell. On the other hand, a home like this is usually quite costly.

A fixer-upper has been around a while, and can be quite old. The home has probably gone though many owners, and has been used for many years. These kind of homes typically have some character, but the new homeowner usually has a long list of repairs or renovations to do.

From shag carpet to outdated kitchen cabinets, these homes might seem like a mess. Another way to look at it is that they give you the potential to make them your own. The price of a fixer-upper is typically lower than newer homes, and the square footage is usually higher. Keep in mind that these homes will require you to put in significant labor – don’t underestimate what it will take to complete.

While thinking about purchasing a fixer-upper, there are a few things you need to remember:

In order to accurately assess how much work will be needed for the home, do the necessary research. Changing the carpet or paint color doesn’t take a huge amount of effort and won’t break the bank. Completely redoing the plumbing or reinforcing the foundation can be a pain and cost thousands of dollars.

For you to invest your money in a house, protect your investment by making sure the home’s structure is in good shape. Steer clear of houses with structural damage, water damage, pests, and outdated wiring or plumbing. Issues like this can be very expensive to fix.

As you tour homes, make note of the items that need to be fixed, and don’t forget about insurance costs. You will be required by your lender when buying a home to also purchase homeowners insurance.

Typically, if you buy an older home, it could cost you more to insure. A home is insured based on it’s condition, and the insurance provider will look at the plumbing and electrical carefully, as well as the heating and air conditioning, and how old the roof is. Here’s why:

The odds of structural weakness and leaks go up as the age of the roof increases. Older plumbing is subject to leaks that can lead to long-term water damage. Outdated electrical systems – particularly those that use fuse boxes and ungrounded power outlets – are a major fire risk.

If the home you are thinking about purchasing has some of these problematic issues, talk to your home insurance provider so you can estimate what it will cost to insure. Remember, you’ll need to include those premiums – as well as renovation costs – as part of your overall budget for your home purchase. Another thing to consider: Once you renovate the home, the risk will be lower but the replacement value will be higher. Don’t forget to talk to your insurance agent about the renovations you’re planning in order to maintain the level of insurance that you require.

If you think you’ve found the perfect house, don’t rush into it and never put in an offer on an older house without out making it conditional on a home inspection. You won’t be able to see all of the problems that a home inspector might see, and you definitely don’t want to buy a house and then later find out termites have caused extensive structural damage.

We offer the only Mississauga home insurance policy that can be truly tailored to your needs. Get a quote and buy a policy online or by phone. Or check out our Home Insurance video.