Pros & Cons Of A Fixer-Upper
The term “fixer-upper” is generally reserved for properties that need a little work to meet modern standards. The level of work required tends to vary; some fixer-uppers are simply outdated and require nothing more than a few upgrades, while others are almost dilapidated and essentially require starting from scratch, or are somewhere in between the two extremes. However, what unites these properties is that people buying them are usually aware that they will need to undergo a series of renovations; that buyers are more purchasing the potential the property offers rather than a finished home that they can live in and enjoy for many years to come.
If you are contemplating buying a new home soon, then considering fixer-uppers could be hugely beneficial… but it could also be a challenging decision that you live to regret. To try and help you decide if a fixer-upper could be the right choice for your family, below, we’ve listed all the pros and cons you’ll need to keep in mind…
PRO: Lower initial cost
Arguably the most significant benefit of fixer-uppers is that they are usually far more affordable than properties that are considered to be “live-in ready”. This means that their total purchase price is lower, which is reflected in the initial down payment that is required to secure the property. Given that saving for a down payment is always a concern for those looking to buy property, this is inherently advantageous. Furthermore, the fact that fixer-uppers are more affordable tends to mean that families who want a bigger home – which they may not be able to afford if they were buying a live-in ready property – can access the space they require for a price that is more suited to their budget.
CON: Higher ongoing costs
Unfortunately, the biggest advantage of fixer-uppers also works against them when it comes to ongoing costs. While live-in ready properties require no work, fixer-uppers tend to need substantial – and often expensive – renovations. Due to this, many people find that the costs of a fixer-upper and a live-in ready property are largely identical when assessed over five years. However, it is worth noting that fixer-uppers do allow buyers to spread the outlays over a longer period rather than needing to find a large initial deposit; a choice which is often more compatible with their overall financial situation.
PRO: Opportunity to create a home to your specific preferences
Often, when people move into a property, they feel that unless there is a pressing need to make a change, it seems best to just live with the design and preferences of the original owner. While this choice is understandable – making substantial, often expensive changes for no particular reason is not the most sensible financial decision – it is nevertheless somewhat restrictive, and can lead to homeowners needing to live alongside elements of the property that they would not have chosen for themselves.
In contrast, fixer-uppers are essentially a blank slate: as most properties of this type will need everything from the windows to the interior decor to be replaced, there’s no need to worry about undoing work that is sound just because of personal preferences. As the changes have to be made anyway, those who buy fixer-uppers have the opportunity to create a home that is specifically designed to meet their exacting tastes.
CON: Can be more difficult to sell
When buying a fixer-upper, many people expect to make a profit on their investment: the money they spend renovating the property will be recouped when they sell in the future. While this approach can and does work very well, it is dependant on the renovation work being complete – which may not always be the case. In a worst-case scenario, buyers can invest a substantial amount and then discover they need to sell far sooner than expected, when the improvements are not significant enough to class the property as truly live-in ready – which can result in a loss. While this scenario can be avoided by committing to performing the renovations as soon as possible, such a strategy is not ideal for those who have chosen a fixer-upper due to the upfront cost savings we mentioned above.
The unfortunate truth is that there is no way of knowing how you and your family will feel about a fixer-upper before you actually give it a try. As a result, you’ll need to make your judgment based on the thoughts mentioned above, as well as your gut instinct. If you do decide that a fixer-upper is for you, we’ve got some great tips for the areas you need to look at first, so you can start transforming the property into the perfect home for your family as soon as possible!