Some houses you fall in love with the moment you set eyes on them. They’re perfect and beautiful and… sooooo expensive. Have you considered looking at a fixer-upper instead? An older house in disrepair may not be as pleasing to the eye, but it’s probably a lot more affordable.
With that in mind, here are some important things to keep in mind before you buy your very own fixer-upper.
Do the Benefits Outweigh the Costs?
Fixer uppers are attractive to many buyers because of one big reason: their price. A home in need of repairs or renovations will usually cost significantly less than one in pristine condition. Since all houses need maintenance and fixing eventually, some buyers feel that it saves money in the long-run to get them done now rather than later. But is that true?
It depends. You can get a good estimate of how much a property will cost you by punching in the down payment, mortgage payments, and insurance expenses into a house payment calculator, then figuring out your expected repair costs added on top. Some houses require so much work, you may never recoup your investment, while others can be resold at a profit.
How Long Will You Be Living There?
There are two kinds of homeowners who tend to get the most out of fixer-upper homes: those who plan to live there long-term, and those who buy with the specific intention of flipping. For example, if you’re looking at a house with the goal of living there for a decade or more, a fixer-upper in relatively stable condition allows you to put a roof over your head and also space out home improvement projects over the course of years.
On the other hand, real estate flippers (people who buy houses for the purpose of reselling them quickly for more money) may find certain fixer-uppers attractive, as long as the repairs they require aren’t exceptionally expensive. When the cost of fixing a house is lower than the value it acquires through said fixes, a smart flipper can make very good money.
Do You Plan to Do the Repairs Yourself?
When you buy a fixer-upper, you know what you’re getting into. It’s not just a house, it’s a project. The question then becomes “whose project?” If you enjoy DIY construction and repair, a fixer-upper offers a broad canvas for customization. That said, if you don’t have a lot of experience, there’s always the danger of doing more damage to a property than good.
Hiring a professional contractor to make remodels, renovations, and repairs is a good way of reducing the risk of home improvements gone wrong, but it comes with its own downside: cost. Professional contractors are more expensive, so deciding which is best for you is a matter of figuring out what your priorities are and how best to meet them.