Is It Worth It to Buy a Fixer-Upper?
Purchasing a new home might seem impossible if you're on a tight budget. A fixer-upper may let you get the house of your dreams at a price that you can afford, but a fixer-upper is also going to have advantages and drawbacks. It would help if you familiarize yourself with these before moving forward.
How Is a Fixer-Upper Defined?
A fixer-upper is a home that has a lower market value because it needs serious maintenance work. You can often live in the fixer-upper while you do the repairs. However, it will take serious money and a lot of sweat equity to make the home a comfortable place to live. Fixer-uppers are great for people looking for a bigger house they can afford or who want to purchase a home, repair it, and flip it for a profit.
Reasons Why a Fixer-Upper May Be Right for You
Purchasing a fixer-upper is a great option for people in certain situations. When determining if buying a house that needs major repairs is right for you, think about your budget, your preferences, and your lifestyle.
The price of the home will be lower than a comparably sized house in a similar neighborhood. However, you're going to spend a lot of money on renovating it.
Generally, there's not a lot of competition for homes that need serious repair. If you make an offer on a home, you're likely to be able to close on it quickly and get a competitive price.
Homes in need of major renovation allow you to make the house what you want it to be. Do you hate the bathrooms? If so, remodel them. Do you want a front patio? If so, build it from scratch.
With a fixer-upper, you have complete control over the quality of the work. You are in charge of choosing contractors, materials, colors, etc.
Reasons Why a Fixer-Upper May Not Be Right for You
While the upfront cost is cheap, renovations can be costly. Depending on the renovations needed, you might find yourself spending more money on a fixer-upper than if you purchased a comparable home that did not require repairs.
It's challenging to budget how much a renovation will cost. You may identify some surface issues that need to be fixed. However, as you start pulling up the floors and tearing down the walls, there will always be costs that pop up and surprise you.
Even if you have the home inspected in advance, there will always be unforeseen issues, especially when purchasing an older home. This means your home will likely be a construction zone for many months.
Is a Fixer-Upper a Good Investment?
It could be a great investment, but it could also become a money pit if you don't do your due diligence. Familiarize yourself with comparable homes in your neighborhood to make sure that your fixer-upper is worth the time and money. Estimate the cost of renovations and add that to the purchase price. If you walk away making money, then a fixer-upper may be right for you.Posted by Website Programmer on