The Pros and Cons of Buying a Fixer-Upper
Is It More ‘Fixer’ & Less ‘Upper’?
Discover the potential cost savings and personalization opportunities of buying a fixer-upper.
Learn about the potential challenges and uncertainties that come with renovating a fixer-upper.
Gain insights into the factors to consider when deciding whether to buy a fixer-upper.
Have you seen an HGTV show on ‘fixer-uppers’ and thought “I could do that”… well you’re not alone. Buying a fixer-upper can be rewarding – both emotionally and financially. But it can also become a nightmare if you’re not careful.
In our experience today many first-time homebuyers aren’t buying fixer-uppers. Just 10-20 years ago it was considered the norm for your first home to be a one. In this article, we'll go over some of the pros and cons of buying a fixer-upper. Hopefully it will help you make a decision about whether it's the right choice for you.
Deciding whether to buy a fixer-upper depends on your budget, willingness to invest time and effort into renovations, and tolerance for unexpected challenges. It offers cost savings and customization potential, but requires careful planning and consideration of renovation costs, time constraints, and potential setbacks.
Pros of Buying a Fixer-Upper
There are a lot of forgotten benefits of fixer-uppers. Today’s buyers seem to shy away from a home that isn’t fully upgraded, but I can tell you from experience that getting your hands dirty and doing the work yourself is one of the most rewarding things you’ll do in your life.
Affordability
One of the major advantages of purchasing a fixer-upper is the potential save money and take advantage of ‘sweat equity’. Generally speaking, a fixer-upper is a home that needs work. It could be a lot of structural and systemic work, or it could be just some cosmetic updates.
Either way, most fixer-uppers are priced lower than move-in ready homes. This can be helpful if you have ‘caviar tastes and a beer budget’.
Customization and Personalization
Buying a fixer-upper gives you the opportunity to make a lot of decisions. You can personalize the property according to your style and preferences. If you are sick of the ‘same-old-same-old’ grey walls and white kitchen look… this is a big draw.
There are lots of ways you can update an older home. Think about remodeling your kitchen, adding a new bathroom, or creating an open-concept living space. Make your home fit your lifestyle.
Potential for Appreciation
By investing time, effort, and money into renovating a fixer-upper, you have the potential to increase its value. This is the very heart of ‘sweat equity’ – you sweat to improve your home, and you grow your equity.
Real estate markets can be unpredictable, but if you make smart choices during the renovation process, you might be able to reap the rewards when it's time to sell. A well-renovated fixer-upper can attract more buyers and command a higher selling price.
Cons of Buying a Fixer-Upper
There are some very real cons to buying a fixer-upper. Some homes are need more ‘fix’ and have less potential for ‘up’.
Renovation Costs and Time
A fixer-upper project requires a careful look at your budget. While the initial purchase price may be lower, you need to factor in the costs of renovations, repairs, and materials. If you’ve seen the Money Pit with Tom Hanks, you have a good sense of additional costs and time… Very few renovations come in under budget and on time.
Renovating a fixer-upper can be very time-consuming. The work can take weeks or even (many) months longer than necessary. If you're doing the work yourself or managing multiple contractors it might be more of a time sink.
Uncertainty and Unexpected Challenges
When dealing with older or neglected homes, there's always the risk of encountering unforeseen problems during the renovation process. Structural issues, electrical or plumbing complications, or hidden damage can arise, adding unexpected costs and delays to your project.
It's important to conduct an inspection of the property to identify issues and get a sense of what you could do. You might find that a project you thought was simply knocking out some walls will now need a structural engineer and load bearing support beams.
Have a contingency plan and be prepared for potential setbacks.
Emotional and Physical Demands
Taking on a fixer-upper can be emotionally and physically demanding. It requires patience, determination, and a willingness to handle the stress that comes with renovation projects.
If you are living amidst your construction project, you should understand that it can disrupt your daily routines. It may require you to relocate – again – during major renovations.
Consider your tolerance for schedule disruption. Do you have the time and energy to devote to a project like this? When my wife and I were shopping for our second home, I thought I wanted a fixer-upper. I was wrong…
The reality of moving, with a baby on the way, made doing something simple like painting the whole house an absolute nightmare. I can’t even imagine if we had bought an even more complex project.
Contractors
So you are ‘A.’ either doing the work yourself or ‘B.’ hiring a contractor to do the work for you. Contractors used to be easier to find. In the past few years finding good contractors has been incredibly challenging.
If you are fortunate enough to find a good one. You might be shocked at the prices they expect to be paid today.
Now that homeowners were spending more time trapped at home during their quarantine(s), many decided to do some updating. Covid had a significant impact on building supplies, driving up prices, and driving up the demand for contractors. Contractors have been able to name their prices – and have been getting it.
Should You Buy a Fixer Upper?
Buying a fixer-upper can be a rewarding experience if you are up for the challenge. However, it's crucial to weigh the pros and cons carefully before making a decision. Consider your budget, time constraints, and your ability to handle unexpected challenges.
As we mentioned before, we’ve found that over the last decade most younger and first-time buyers have avoided fixer upper homes in our region. Many new home-buyers are looking for everything to be ‘finished’ and in move-in ready condition.
Which is a shame. Most people have little ability to make their home more valuable. The ability to customize and improve your home can be incredibly empowering. You have the ability to substantially increase the value of your home and its livability.
But we recognize that it is not easy and it’s not for everyone.
So before you jump into a big home renovation ~ consult with professionals, such as contractors and real estate agents. They can give you valuable guidance about what you want to get done. They can help you make an informed choice of whether buying a fixer-upper is a good idea.
Good luck with your home buying journey!
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