Buying a Fixer-Upper: What You Need to Know

Buying a fixer-upper is something that most homeowners dream about at one point or another. Fueled by HGTV shows and beautiful, online “success story” slideshows, homeowners around the country fantasize about purchasing a fixer-upper and flipping it – creating for themselves not only a life of financial freedom, but also one of creativity.

Unfortunately, the process isn’t often as simple as it seems. While buying a fixer-upper is a smart idea for some, it’s not right for everyone, and homeowners who understand the benefits and drawbacks of the decision are better equipped to make a smart call.

Things to Consider Before Buying a Fixer-Upper

Buying a fixer-upper is an exciting prospect, but is it right for you? Consider the following things before taking the leap:

1. The cost of renovations and repairs

In many cases, the cost of renovations and repairs on a fixer-upper far exceed the original budget. Things like defects not detected in a home inspection or unexpected breaks, leaks, and damage can drive the cost of flipping a fixer-upper up hugely, and it’s important to honestly assess the cost of the fixer-upper before you sign the purchasing documents.

2. The time it takes to renovate an older home

The biggest appeal of move-in ready homes is that they’re simple. Instead of spending months or even years ripping out carpets and repainting walls, move-in ready homes offer the ability to simply move in.

With a fixer-upper, this isn’t true. Instead, fixer-uppers will demand a great deal of your time, and may easily become too much to bear. While the payoff is often great, it’s important to ensure you’ve got the time to take on a fixer-upper before you purchase a home that needs a great deal of work.

3. The fixer-upper’s location and future potential

Far too many homeowners have gotten excited about the prospect of a fixer-upper and forgotten, in the process, that the end value of a home is determined in large part by its location and specifics.

For a fixer-upper to pay, you’ll need to ensure you’re purchasing one in a high-demand neighborhood. You’ll also need to ensure that the home has the features would-be buyers would want and that its resale price will make the home worth the investment.

4. The amount of work involved in a fixer-upper

One thing nearly all homeowners underestimate about fixer-uppers is the amount of work they take. If you purchase a fixer-upper, you’ll need to expect to spend a great deal of time ripping out walls and tackling complex new projects.

Because of this, you’ll need to spend some time considering whether you’re really ready for such a large investment of time and effort or not.

Fixer-Uppers Aren’t Right for Everyone

While a fixer-upper is a big job that’s not a match for every homeowner, it can be rewarding for the people who are ready to invest the time, effort, and funds needed to make it work. Because of this, it’s wise to ensure that you’re a good candidate for a fixer-upper before you commit to purchasing one.