The Pros and Cons of Buying a Fixer-Upper

There are several TV shows about people restoring run-down, outdated, or abandoned houses for a living. After watching a bunch of episodes and seeing houses beautifully transformed, it’s easy to feel you can do it yourself.

This could be the chance to buy your dream home. Still, it’s important to note that buying a fixer-upper is a significant investment in time and money. So, here are the pros and cons of buying a fixer-upper.

What Is a Fixer-Upper?

A fixer-upper is a house that requires major maintenance work. The buyer has to restore the property to a comfortable living condition. As such, the price is lower than the market rate.

Pros

Buying a property that needs work can be appealing, and with good reason. Here’s why people are drawn to this option.

Lower Purchase Price

Buying a fixer-upper is certainly cheaper than purchasing a house that’s move-in ready. It’ll come with a lower listing price and down payment requirement.

Since no two houses are the same, there’s no direct comparison as to how much money you’d save. Still, this could be your way of joining a neighborhood that’s typically out of your budget.

Less Competition

There’s typically less competition when it comes to purchasing a fixer-upper. Many people are looking for a move-in ready home or they don’t have the time, energy, or resources for renovation projects.

Luckily for you, that means you’re less likely to be in a bidding war, and the deal could go quicker and more smoothly.

It’s Customizable

Once you own a home in need of repairs, you have the freedom to truly customize the space. Meet your wants and needs by remodeling the kitchen countertops, changing out the bathroom tiles, building a deck, or expanding the living room.

While it’s a lot of work, it’ll give you a sense of accomplishment.

The Value Will Increase

By choosing specific upgrades, the value of your fixer-upper will increase. If done correctly, you could flip your fixer-upper and make a significant profit. Know the value of renovations before starting, so you can be aware of what will add the most value to your house.

Cons

Also consider the pitfalls of buying a fixer-upper. While you’ve learned this strategy can be profitable, the drawbacks listed below could impact your success.

Unforeseen Problems

Fixer-upper homes often come with unforeseen problems that lead to extra costs. While setting a budget is necessary, it may not be realistic depending on if extra repairs show up along the way.

Costly Repairs

Look at the renovations required. Cosmetic repairs include replacing the windows, refinishing the kitchen, and updating the floors, paint, and siding. This minor work has the biggest return on investment.

Structural repairs, on the other hand, include fixing the cracking foundation, updating the electrical wiring, and putting in better roof support. These renovations are costly and don’t provide much of a return.

Cost of Building Materials

Lumber prices have been inconsistent, with record-setting spikes and periods of decline. According to the National Association of Home Builders’ latest estimates, the price changes between April 2022 and July 2022 are enough to add $14,345 to the price of a new single-family home and $5,511 to the market value of a new multifamily home.

This price increase in lumber, in turn, also affects the cost of renovating older homes.

Long-Term Construction

This is not a fast endeavor. Home renovations are time-consuming and it could take months or years for everything to be completed. Plus, unless you have somewhere else to live, you’ll be living in a construction zone, which isn’t necessarily feasible.

More Stress

Fixing up a house is stressful. Doing all the work yourself will easily eat up all your free time. So will finding and hiring contractors and supervising their work.

To reduce stress, ask your contractor, lender, and realtor any questions you have to make sure you understand what’s involved and that repairs are being done properly.

Work With an Expert at The Massey Team

Is buying a fixer-upper right for you? Find out by talking with the professional realtors at The Massey Team at Berkshire Hathaway HomeServices Select Properties! We don’t just sell homes; we help others make positive life changes.

Our goal is to make the process of buying or selling your home as stress free as possible. Simply give us a call at (618) 791-5024 or (618) 791-9298 to talk with a member of our team!

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