The purchase of a fixer upper is becoming a more common choice, as sales of this type of home have risen 13,4% from 2020 to 2021. Despite what you may see on HGTV or social media, buying a fixer upper and bringing it to a livable condition is not an easy task.
The risk involved in buying real estate is something that all buyers must consider. How much risk you are willing to take depends on your personal preferences, lifestyle and short- and longer-term financial goals. There’s more to consider than the price of a fixer upper when you decide to invest in it.
This article will give you a quick overview of the pros and cons to choosing a fixer upper. Keep these in mind as you decide whether or not to make an investment.
The Pros of Fixer-Uppers
With enough money, imagination and work, you can make any property your dream home. Fixer-uppers offer a lot of potential to those looking for long-term gain.
The following are some of the most important pros to buying a fixer upper property:
- Lower prices– If you search in the right places, the price of a fixer upper could be much lower than a home that is ready to move into. This could result in you getting more space for your money, and a lower deposit.
- Less Competition – Fixer-uppers aren’t for everyone so there won’t be as much competition in your search. As an added bonus, the seller may be more willing to negotiate on price because their pool of buyers is smaller.
- More possibilities– A fixer-upper offers an incredible amount of customization. When you are down to the studs you have a lot of options.
The Cons of Fixer-Uppers
It’s important to weigh the above advantages against some harsh realities of investing in a fixer upper. There’s a good reason why so many buyers are willing to pay more for a turnkey house.
Cons to be aware of include:
- Renovation costs are higher up front– You may pay more in renovation costs for the money you saved on purchase price or down payment. A mid-level kitchen renovation alone cost between $15,000 AND $29,000, and that’s only one room out of many.
- Unanticipated Issues– A home purchase can be a surprise. This is particularly true for fixer-uppers. Costly problems could be lurking behind each wall and floorboard.
- Expect a longer timeline– Your fixer-upper may take months or years to become a suitable and safe place to live. Be realistic with your timeline and, if you are in a rush to move, get a thorough inspection as soon as you can to find any problems that may hinder you. It takes a lot to buy a fixer upper, whether it’s with or without land. Working with an experienced agent and financial advisor to decide if this is a good investment, and consider the pros and the cons before you sign on the dotted lines. Are you thinking of Buying? Our agents at Preferred Properties of Texas are here to help!