What to Know before Buying a Fixer-Upper

Fixer-upper buying is just one way to eat your cake and have it to. But, is it really? The home buying process is generally an exciting one. However, that doesn’t mean it’s without its downsides. When you’re ready to buy a home (be it the first time or a repeat), you might come across a fixer-upper or two or more. While such properties do offer some great incentives, they are not risk free. Buying a fixer-upper comes with some real challenges. There are pros and cons to going this route, so you should keep your options open.

Fixer-Upper vs Move-In Ready Resale

The fixer-upper buying alternative is generally good for those who like DIY projects. And, for those who have the necessary skills. But, what if you don’t have either? What if you aren’t keen about do-it-yourself projects? Or, you don’t have the skill set to do the work? Then a move-in ready resale might actually be a better fit for you. After all, if it’s move-in ready, there’s nothing big to do and that’s a huge plus. But, it also means paying more upfront, which increases your acquisition cost.

“For people who love old houses — and love to work on them — the notion of buying a fixer-upper can be irresistible. Just think: You can snag a rundown place in a good neighborhood for way below market price, invest some time and money renovating it, and end up with a like-new house that’s worth at least twice what you paid for it. Sounds good, right? Often, it is. But buying a fixer-upper can be fraught with peril. So before you take the plunge, make sure you have a realistic idea of what you’re getting into.” —This Old House

What’s more, a move-in ready home means you’ll have more time to spend on little changes and updates. However, it also means having to compromise on certain things you don’t really like. A move-in ready home provides you with a sense of security, that there’s nothing lurking, waiting to leap out at you. But, a move-in ready home can also conceal some potential or unmanifested problems.

Fixer-Upper Buying Pros and Cons

If you’re undaunted by purchasing a fixer-upper but still have some reservations, then you should know the pros and cons. Here’s what you should consider before you commit to purchasing a project house:

  • Pro: You can customize it. The great thing about a fixer-upper is that you can customize it, inside and out. You can put your own special touch on it. The sky’s the limit and you’re free to let your imagination guide you.
  • Con: You can over customize it. The problem with customizing any home is you always run the risk of over customizing. That means come resale time, you’ll have to undo some of those customizations so it appeals to a wider group of buyers.
  • Pro: You can fetch a great deal. It’s true you can get a good deal when purchasing a project home. And, if you play your cards right, you’ll land a tremendous deal. That’s enough to make almost any fixer-upper a competitive candidate on your shortlist.
  • Con: You can erase any savings. While you might score an incredible deal, you can watch those savings disappear if you don’t create a realistic budget and stick to it. In a short time, you can go from deal to dud, depressing the ROI.
  • Pro: You can improve it. Of course, with a fixer-upper, you can make improvements. Big improvements, like an addition, a pool installation, even adding another story.
  • Con: You can over improve it. There’s a thing known as over building for the neighborhood. It means creating the most expensive property on the block and that’s bad when it comes to resale potential.

If you’re going to sell your home in the near future and buy a new house, please don’t hesitate to phone me at 407-616-7286, I’ll be happy to speak with you.