With the reality of higher interest rates and – in some markets – low inventory, we’ve heard multiple homeowners considering the pros and cons of buying a fixer upper. Their goal is to save on the purchase price. However, it’s also a commitment that comes with some… unique… challenges. Here, we’ll break down the pros and cons of buying a fixer upper to help you decide if it’s the right choice for you.
Pros of Buying a Fixer Upper
1. Lower Purchase Price
One of the main attractions of a fixer upper is the lower price point. Homes that need repairs or updates typically cost less than move-in-ready homes. This lower upfront cost may make buying a home more affordable, especially in competitive markets.
2. Personalization Potential
Buying a fixer upper allows you to customize the space to fit your tastes and lifestyle. From flooring to finishes, you get to make design decisions that turn the house into your ideal home. This can be especially appealing if you have a particular vision in mind that’s hard to find in existing homes.
3. Opportunity for Added Value
Renovating a fixer upper can increase the home’s value, which can be beneficial if you plan to sell in the future. Making strategic improvements in areas like the kitchen, bathroom, and landscaping can yield a solid return on investment.
Cons of Buying a Fixer Upper
1. Renovation Costs
While fixer uppers cost less upfront, renovation costs can add up quickly. Unexpected issues like outdated wiring, plumbing problems, or structural repairs can drive costs higher than expected. It’s essential to budget carefully and have a contingency fund for unforeseen expenses.
2. Time and Effort
Renovating a fixer upper requires time and effort. Projects can take weeks or even months to complete, disrupting your daily life. If you’re planning on doing DIY work, consider the commitment involved—both in terms of labor and patience.
3. Risk of Overcapitalizing
There’s a risk of spending more on renovations than the home is worth. This can happen if the property needs extensive repairs or if the housing market shifts unexpectedly. Before buying, get a professional inspection and estimate the costs carefully.
It’s hard to know exactly what you’re getting into with a fixer upper. But, we would recommend – no matter what – getting a great inspection up front to see what you may be in for. If your inspection comes back promising, and you (or your friends and family) are ready to get their hands dirty, you could have the house of your dreams.