Buying a home is not for the faint of heart; it’s a costly, stressful process no matter what type of home you buy. So is buying a fixer-upper worth the extra time and stress? It’s up to you!
A fixer-upper comes with many pros and cons but it also comes with a huge investment opportunity. Keep reading as we discuss the pros and cons of buying a fixer-upper house.
What is a fixer-upper?
Though the term is constantly being tossed around, a true “fixer-upper” is a house that is listed under market value due to substantial structural and/or cosmetic flaws. A fixer-upper house can typically be lived in while making renovations, but it can be a hassle especially if you have children. Many people choose to purchase fixer-uppers, renovate them, and sell them for a decent profit.
- Low Upfront Price – The great thing about buying a fixer-upper is how cheap they are in comparison to market value homes. Your upfront down payment and closing costs will be much lower than normal.
- Decision Making Control – If you love making design decisions, buying a fixer-upper may be the right move for you. A fixer-upper requires a lot of decision-making but in the end your home will be customized to your wants and needs.
- No Competition – Another pro when it comes to purchasing a fixer-upper house is the lack of competition in a competitive market. It’s unlikely you’ll be in a bidding war for a house that needs a lot of work.
- Investment Opportunity – A fixer-upper home has return on investment (ROI) potential which is very attractive for the right buyer.
- Renovations Are Costly – Though the upfront purchase price of the home will be low, you need to keep in mind that renovations are expensive and will add up. You need to have money set aside just for renovations or be willing to make them slowly over time.
- Live In Construction Zone – Living in a house that is being renovated means living in a construction zone. It may not work for your family if you have younger kids or adventurous pets. Be sure to think through what living in a fixer-upper means for you and your family before taking on this commitment.
- Surprise Costs – It’s important to remember that budgeting for a fixer-upper project is almost impossible. Estimating for simple renovations could turn into something more if any issues arise, and there’s a good chance they will. You must be ready to cover unexpected costs along the way.
Is buying a fixer-upper the right investment for you?
A fixer-upper is unlike other houses and you need to be prepared for all it entails. As long as you are ready for the process both mentally and financially, you have massive earning potential. If you have questions about buying a fixer-upper and need advice, we’d love to offer our guidance. Give us a call at 574-527-1700 or email us at Kim@homeswarsaw.com and we will do our best to help you during this exciting adventure!