If the TV shows are to be believed, buying a fixer-upper is a sure-fire way to save money and create the home of your dreams. However, real life doesn’t quite work like that, and while there are indeed numerous benefits to buying a fixer-upper, there are disadvantages as well. If it’s something that you’re considering, it’s well worth looking at both sides of the coin.
The Advantages of Buying a Fixer Upper
While the TV shows don’t generally depict a realistic view of what buying a fixer-upper entails, they are extremely popular and do a good job of focusing on the benefits. In the real world, it’s no exaggeration to say that there’s a lot to be gained from purchasing a fixer-upper.
You can buy more house for your money
Homes that are in need of repair will inevitably be on the market for a lower price than similar, turn-key properties. You can expect to make big savings, allowing you to buy a bigger house than you might otherwise be able to afford. Be sure to do your research though, as sometimes these savings are not as high as you might imagine.
It’s a good way to get into your dream neighbourhood
With a lower price tag, a fixer-upper could be your ticket to the neighbourhood of your dreams. This is often the case in more popular neighbourhoods, where turn-key homes fetch a far higher price and don’t stay on the market too long. There’s an old real estate adage that goes something like; ‘buy the worst house on the best street’.
There’s less competition
In today’s busy world, not many people have the time or energy to commit to renovating a fixer-upper. As such, there’s a much smaller market for them, giving you a wider selection to choose from and a stronger position from which to negotiate.
Good potential for profit
Fancy yourself as a real estate investor, buying cheap, run-down houses, flipping them, and moving onto the next project? It’s not an impossible dream, and when done properly, it can be extremely lucrative. However, you’ll often need to have saved a decent amount as back up in case things turn out to be pricier than anticipated.
You’re in full control
Buying a fixer-upper gives you a blank canvas on which you can really make your mark. You have full control over everything from wall colours and flooring to countertops and appliances, and pretty much everything in between. With larger renovations, you can even dictate the layout and redefine the floor plan to better suit your lifestyle.
You can save a lot of cash
If you’re handy with a hammer and a drill, there are a lot of tasks that you can comfortably undertake yourself. Painting, laying flooring and basic plumbing jobs can all be completed by anyone with even a little DIY experience. This in itself can save you thousands of dollars by not having to pay contractors.
The Disadvantages of Buying a Fixer Upper
So far so good, but don’t get too ahead of yourself! There’s more to it than that and buying a fixer-upper comes with its fair share of disadvantages. Let’s take a look.
It can be extremely stressful
Depending on the state of your new home, you might not even be able to live there until the renovations are complete. Or, if you do choose to live onsite, you’ll be living within a construction site, possibly for many months. On top of that, you’ll have to manage designs and coordinate the work and deal with unexpected surprises. A fixer-upper can put a lot of strain on even the strongest relationships, and shouldn’t be entered into lightly.
It can be more expensive than you think
Even the best-laid plans seldom work out as expected, and it doesn’t take long for costs to build up. Before buying, you have to create a realistic budget for how much it will cost to renovate properly, and even then you should add at least 15% on. Financing home improvements can be difficult, and there’s no one size fits all solution.
You may run into unexpected problems
Your renovations can be delayed for any number of reasons, from the discovery of asbestos or outdated wiring to a contractor going bust or the sudden loss of your own job. This can leave you in a delayed state of stress and anxiety and can ruin any other plans you might have had.
Think long and hard about whether this is the best choice for you. If you decide to go for it, be sure you have an exit strategy in case things do go wrong. But, with careful planning and a sensible approach, you could end up with your dream home.