The Pros & Cons of Buying a ‘Fixer-Upper’ Home

Entry #1429, August 1, 2012

If you’ve been thinking about investing into some real estate, rather than purchasing a brand new home (that can cost quite a bit of money), you may have been considering buying a “fixer upper”, instead. That way, you can get the property for much less money and then fix it up at your leisure (which usually means, as you can afford to do so).

However, just because you get the home for a fairly cheap price initially, that doesn’t necessarily mean that you ended up with a bargain. In other words, sometimes you can purchase a piece of property at a really great deal, while getting into a situation that ends up being way over your head.

Should you buy a “fixer-upper” home?

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So, how can you know if a fixer upper is something that you can realistically handle? Here are some really great tips:

Consider the Perks of a Fixer Upper

When it comes to actually looking into some homes that need a little bit more work than others, there are some definite benefits. Aside from the lower asking price that you will probably be able to get on the house, it may be a way to get into a neighborhood that’s property value would otherwise be too expensive for you (if it were a newer home). Plus, as a major DIY project, it gives you the freedom to use your own creative ideas to bring out the individuality that you would like for the house (especially if you plan on living in it rather than flipping it over and reselling it to someone else).

What You Should Look Out for Before Making the Purchase

Now that we’ve explored some of the pros to purchasing a fixer upper, let’s take a minute to talk about some of the cons that can make getting the home a real headache rather than a true blessing. Sometimes, people are so quick to want to get a certain home (at a certain price), that they never take out the time to consider why the house may be up for sale (for so cheap) in the first place. Therefore, in order to spare yourself a lot of potential regret, it’s a good idea to take a home inspector along with you to thoroughly look through the house. They will know to look for rodent (include termite) infestation, structural damage and wiring and plumbing issues. If you discover that the maintenance on the house will cost more than the home is actually worth, that is a reason to seriously reconsider it. For instance, paying half a million to restore a home that is only worth $200,000, especially with this current real estate market, may not be the wisest kind of investment.

An older maybe the perfect solution for you

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Review Why You Want to Do It…Before You Do It

As you’re looking for the right kind of house, whether it’s Houston real estate, Nashville real estate or anywhere else in the country, make sure to keep your eyes on the prize by staying focused on the ultimate reason why you desire to make the purchase in the first place. If it’s to buy the home, fix it up and resell it, then make sure that the purchase will ultimately make you a profit. If it’s so that you can create your own dream home, then don’t buy the home unless it can meet your basic needs. Bottom line, when it comes to a fixer upper, you’ll know that you can handle it if it seems like a fun thing to do that will not put you into long-term debt; if once you fix it up, all of the work was truly worth it. Literally.

For more home buying & selling tips on Stagetecture, click here.