Chances are, if you are in the market to find a new home you have considered buying a “fixer-upper”? Sometimes we shy away from these because we just aren’t sure if it’s a practical move or not. We all want to buy our dream houses but could it be possible that a fixer-upper is that dream house in disguise?
Check out my pros and cons list below to help you decide whats right for you!
PRO – The first and most obvious reason to purchase a fixer-upper is the price. There are often significant savings over buying other homes. It’s important to think beyond the short-term savings and consider the long-term financial cost when assessing whether this purchase is worthwhile or not. What will need to be repaired/renovated? How much will those repairs and renovations cost? How soon must those projects be completed and what are my holding costs?
PRO/CON – There are often fewer competitors interested in purchasing a fixer-upper. This can be especially helpful in areas with low housing inventory and a high level of competition (which of course, may lead to higher prices and bidding wars).
PRO – To a degree, a fixer-upper can be somewhat of a blank slate for you to customize the way you want.
PRO – You may have the opportunity to build the equity in your home quickly depending on the types of changes you are making to your fixer-upper.
PRO – You may be eligible for certain loans or Manitoba Hydro rebates based on the types of repairs and renovations you are making.
PRO – For someone who loves being creative and working with their hands, this could be an ideal purchase. Let your creativity flow!
CON – Expect the unexpected. Even with a home inspection there are often surprises along the way. You will need patience and it’s advisable to have a separate budget set aside to accommodate those unplanned expenses. Take it from me, once you start opening up walls, there is a good chance there will be more costs incurred.
CON – Some of the updates that may be required won’t be terribly effective in increasing the equity in your home right away. Personal choices and taste for example. Repairs such as plumbing and electrical system overhauls will raise the value of your home as buyers like to hear that you have new windows, new shingles, plumbing and the big one of "No knob and tube wiring".
CON – When purchasing a new home, you have some options in choosing location. With an established home, you are obviously locked into a specific location. You always need to consider the location but with a fixer-upper, there can be another important consideration. After completing the renovations to your home, will you have raised the value of your home to a point where you have now priced yourself out of the neighborhood? Resale can be trickier if your home is priced much higher than the rest of the homes in the area and you may have to take a loss in order to get your house sold.
CON – Sub-contractors need to be carefully chosen. We’ve all heard horror stories about home renovations gone wrong so it’s essential to find reputable contractors or you may find yourself losing money, time, and patience. 3 quotes, referrals from friends/family and your REALTOR, but also references.
Consider these pros and cons before deciding whether purchasing a fixer-upper is the right choice for you. Please feel free to call me anytime to meet and to discuss your options and whats for sale that may work for you and your family.
Buy, Sell or invest....you are working with one of the best! I'm Alison O'Toole and I want to be your REALTOR.®