When looking at home listings, you might see a note that a property needs some tender loving care or TLC, meaning the house requires work done to make it move-in ready. Such a house can provide an opportunity to get a cheaper price and customize the place to your liking, but it also can require a lot of financial risk, time and hard work. Before buying such a property, understand the pros and cons and make sure to have the property thoroughly inspected so that you can decide if the time and effort needed will be worth it.
When you see the letters TLC in a real estate listing, it means the home needs tender loving care.
TLC Real Estate Meaning
Should a home need TLC, you can assume this means that you'll need to have some type of repairs done. However, the actual amount of work necessary can vary heavily depending on the property. While looking at photos of the place and visiting it in person can help clarify some issues, you'll need a professional home inspection to catch more invisible problems. Be warned that some sellers might also use the term "TLC" to mean the place needs a thorough overhaul rather than just some basic repairs.
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For example, you could deal with a place that just has cosmetic issues like stained carpet, worn paint or some minor holes in the walls. Similarly, the house might have stained carpet or a few loose nails in the handrail going up the stairs. On the other hand, another house that needs TLC could actually have very costly issues like a broken plumbing system, damaged roof or even a failing foundation.
Benefits of Buying TLC Homes
As long as you're prepared for the work needed and consider those additional costs, buying real estate that needs TLC can help you save some money. Zillow reports that such homes may have selling prices between 4.2 and 8.7 percent less than what the seller planned to get. This can allow you to find a property in a desirable location you otherwise couldn't afford. The lower house price usually also means less spent on property taxes.
Buying a home that needs some updates can give you the opportunity to customize the place to make it your own. The cheaper home price can leave you with cash to set aside to get your favorite type of flooring, paint the walls to your liking and install any upgrades like new cabinets.
When you buy a home needing TLC, you also have the chance to put in work to significantly raise the home's value. If you're interested in real estate investment, you could do some upgrades to make the house move-in ready and potentially flip the property for a profit. Even if you stay in the home, you can make improvements over the years so that you make more money if you choose to sell and move.
Considerations for Buying TLC Homes
While buying a TLC home can help you save or make money, you also risk having to put so much money into repairs that you don't see a decent return on the property. Unless you get a very thorough home inspection, you might underestimate the work required to make the place move-in ready. As repairs add up over time, it can become hard to track how much you've spent on the property.
Should the home need TLC, you likely will need to wait some time to move in, which can be inconvenient when you need housing quickly. This delay will depend on the nature of the repairs needed and can run for several months. In the meantime, you also have to put time into either doing the repairs yourself or finding contractors to do the work. This can put extra stress on you and your family.
You also should consider that such a home can be harder to sell should you decide you no longer want it for some reason. You can lose money if you already begin repairs and decide the effort and expenses are no longer worth it. Not only will you incur expenses selling the home and likely get a lower offer, but you have to consider the money lost to building permits, inspections, appraisals and loan fees.