Is Buying a Fixer Upper Worth It?

Compared to a completely updated home, you can save tens of thousands on the overall price of a home that needs a little work. This savings trickles down to a smaller monthly payment and a smaller down payment which can be very attractive for your wallet!

When thinking about buying a fixer-upper, first consider money, time, and ability. Do you want renovations done now or overtime? How will you pay for them?  Are you capable of doing the renovations or will you need to hire it done?

Once you answer those questions, if you are still saying ‘Yes’ to the possibility of a fixer-upper, here are some other things to think about:

Location– There are lots of things you can change about a house, but location really isn’t one of them. Make sure that you like the neighborhood, schools, proximity to work, and the grocery store. Look online at the crime rate for the area. Think further down the line as well, is this a good area for resell?

Inspection– A home inspection is always important when purchasing a home, but especially if you are planning on doing renovations. It can show issues that you already plan to fix, but it can also show issues that weren’t in your plans and are too costly for your budget. Inspections are done during your option period of the contract, if the problems seem too big to tackle you still have time to negotiate repairs, a lower sales price, or opt-out of the contract altogether.

Budget– To prevent costs and rainbow dreams from spiraling out of control, set a home renovation budget before you buy.  You’ll save money by doing projects yourself, but make sure you can do them well. Spot the projects that are too big for you to tackle and get bids from local contractors. Put your projects in a priority-ordered list along with cost/bid and timeline of completion. Inspectors can’t get inside walls to see everything going on with a house, so keep a little money aside just in case you find something during your renovation that should also be fixed. Make sure that your renovation goals and budget align.

Don’t Out Build the Neighborhood– Be careful not to add too many custom features and upgrades to where you’re the most expensive house in the neighborhood. If that happens it can make getting all of your renovation money back difficult when you decide to sell.

Buying a fixer-upper that is priced right and is in the right condition for you to stay within your renovation budget can be tricky. Utilize a Realtor you trust who knows the area to help you find a home that will stay within your budget and also be a great investment for the future.