MANHATTAN — A handyman’s dream. An architect’s delight. Needs some TLC — these are some of the real estate euphemisms that let you know a home will need a serious renovation.

Roughly 10 percent of prospective buyers would consider a home that needs major remodeling, according to Doug Perlson, co-founder and CEO of RealDirect.com, an online brokerage that employs a search tool for wrecks.

“As home prices increase and as competition increases, the idea of a 'fixer' becomes almost a necessity for some people because the buyer pool shrinks pretty dramatically for those who want to do the work," Perlson said.

A fixer-upper might cost less than something newly renovated, but having to rehabilitate a home can turn into an expensive headache, experts say.

“It's important to understand the difference between a full renovation and cosmetic work,” said Miron Properties’ Jeff Schleider.

“Grouting, paint, new cabinets, even changing floors — that’s pretty cheap and easy. You don't need to file permits for that. But a gut renovation, where you're redoing the plumbing and electrical, that's a big deal.”

Schleider, for instance, recently listed a massive townhouse at 2064 Fifth Ave. in Harlem for $3.495 million. While a renovated house of this size would likely go for roughly $5 million, this 15 bedroom, five-floor home, filled with original details, needs at least $700,000 worth of work, he said.

“If you're willing to do the renovation yourself or have a relationship with a contractor and architect, than you can see some upside,” Schleider said. “Or, if you just want to create the place of your dreams and know exactly what you want and don't want to pay for someone's else’s renovation.”

But, he warned, “Before you buy, you should bring in three contractors, take the middle price, add 25 percent and double the amount of time."

1. A fixer-upper isn’t necessarily a bargain

As with any type of housing in this tight market, there may be bidding wars.

Sharon Cohen, of Keller Williams NYC, said that within one week of listing a $1.05 million two-family brownstone at 795 Lincoln Place in Crown Heights in need of a total rehabilitation, nearly 100 people inquired about the property — and that was during the slow time of the holidays.

Perlson said the best deals were usually the properties that have been on the market for a while.

Sometimes a seller who has high expectations for a price, will reject initial offers and then see that listing sit for several months, he said.

“They’re often more receptive to a lower bid a few months later, and that’s where the opportunity is for buyers,” he said.

2. Find a contractor you trust

Besides getting references from homeowners who have done similar types of projects, go and see projects the contractor is doing, Schleider suggested.

“Don't just go with cheapest. A lot of contractors bait [with a low estimate] and then charge for other stuff.”