Is It Worth Buying A Fixer Upper?

is it worth buying a fixer upper

Depending on your financial situation and what is available on the market, you may find yourself asking, “Is it worth buying a fixer upper?” While it’s not everyone’s cup of tea, a fixer upper can be a viable option to purchase a home affordably. It can also be a great opportunity to put your own personal touches on a property.

Generally, fixer uppers can be purchased at a lower price due to maintenance and upgrades needed throughout the property. These needed repairs may be a deal breaker, especially if you don’t want hassle and the home is in rough shape. The current status of the home is something to consider carefully before deciding to buy a fixer upper.

Timing and DIY skills should also be considered. Some fixer uppers may not be move in ready, and may take time and skill to get the home ready to live in. The purchaser’s budget, immediate home needs and lifestyle will determine whether a fixer upper is the right move.

How much extra cash you have on hand should also be considered. One benefit of purchasing a fixer upper is being able to put your own aesthetic and sweat equity into the property. However, there can be risk, and end results aren’t guaranteed. Putting in so much effort and money could result in a home that is a wonderful investment or a potential money pit. Read on for expert advice from the Adirondack Premier Properties team on how to decide if a fixer upper is right for you.

The PositivesIs It Worth Buying a Fixer Upper?

If you are looking into purchasing a fixer upper, there are multiple benefits that you could enjoy. Some of these positives are: larger property, location in desired neighborhood/town, chance to put your own touches on the property, and potentially higher return if you decide to sell later.

Depending on the current market, you might not to be able to find a home with enough bedrooms or large enough square footage in your price range. Fixer uppers provide the perfect opportunity to find a larger property at a favorable price. For example, a fixer upper 4-bedroom home might be listed for $300,000 while a fully repaired home in the same market might sell for $350,000. Saving $50,000 on the purchase price might leave room to put those funds towards updates and repairs.

When deciding is it worth buying a fixer upper, also consider the rate at which you can build equity. If the fixer upper owner is able to put $25,000 into fixing up the property, they will already have $25,000 in equity toward their home.

If you are looking in a neighborhood or town that you can’t afford, a fixer upper could be your solution. In the Adirondacks, some towns are considerably more expensive than other towns on the outskirts. Finding a fixer upper in the more expensive area can open up the opportunity to be in that location. However, you may need to put in extra work to fully enjoy it.

Depending on cost of repairs and your budget, a fixer upper can offer a chance to customize and add personal touches throughout the property. For example, if you have a $25,000 renovation budget, you could allocate $10,000 toward repairs that make the home livable and secure, and use the remaining $15,000 to add special touches and cosmetic updates to make the place your own. A contractor can be hired to complete needed repairs and desired esthetic updates all in one stop.

Depending on the price of the repairs and how they affect home value, you may discover big return on your investment when you go to sell. While there are are no guarantees in the ebbs and flows of the real estate market, if you find a great deal on a home that you can repair and upgrade, your chances of this happening may be bigger than you think. The $300,000 fixer upper from above could be worth $500,000 in a few years in a strong market. If repairs and continued maintenance total $50,000-$75,000 during that period, you could net $125,000- $150,000 in profit.

The Negatives – Is It Worth Buying a Fixer Upper?

While there are many positives that steer you towards answering yes to “Is it worth buying a fixer upper?,” there are almost just as many negatives to consider. These negatives include: time commitment, repairs and renovations, cost and stress.

Depending on the work that is needed to repair the property, you should expect a larger time commitment than your most conservative estimate. Whether you are completing the work yourself or hiring a pro, you will be the foreman for the projects that need to be completed. This means you will be choosing all the finishing, checking in on the status of the work, and finding the correct people to complete the jobs. Be sure you have the motivation and time to work through this.

Another thing to consider when asking “Is it worth buying a fixer upper?” is what essential repairs or updates are necessary to make the home a livable residence for your situation. Do the major systems need to be replaced? What essentials need to be completed to make it livable?

These repairs and renovations can add up and make the process very frustrating, especially when you find out projects are more in-depth than originally planned. Repairs and renovations can turn into an ongoing process with different projects continuing even while living in the home.

Some needed repairs can be very costly to a home buyer, especially after already absorbing closing costs. Going into the repair process with a clear vision of what needs to be done can help you get off to a good start, but be prepared to run into issues along the way. Some repairs in Adirondack homes can be very costly, especially those involving major systems like the heating, plumbing, electric or roofing. The sometimes extreme conditions in the four seasons of the Adirondacks make these systems a priority.

Finding more repair issues needing attention leads to more money going out. For some this might lead to a disappointed no in response to the question of “Is it worth buying a fixer upper?” Having an inspection done can help foresee some of the potential repair issues, but may not find them all. This is why some people call fixer uppers “Money Pits.” Unfortunately, as soon as you fix one issue, others can start popping up. By the time you finish, you may have paid more than if you purchased a turn-key home.

With the time and money put into repairs and renovations, it can become stressful to you and your family. If you are completing repair work yourself, most of your extra time will be spent working on fixing the property. No free time may result in missing out on some other life events.

Even if you hire a professional to complete the work, it can be stressful on your wallet and life. Coming up with enough cash to hire someone, purchasing materials and supplies, checking in on the project status and keeping the project on a timeline can be stressful. Projects often have a tendency to become bigger than expected, so planning for additional time than quoted finish date may be wise. Issues like unforeseen problems or materials backorders can cause delays.

Moving Ahead – Is It Worth Buying A Fixer Upper?

For a first time home buyer, getting to really know the property during updates and repairs can make the decision of is it worth buying a fixer upper a huge yes. By the time you are finished with improvements, you will know the in’s and out’s of your property and have detailed knowledge about the work that was completed. While this can be a costly adventure, it may be worth it to have the home of your dreams.

We always suggest having an inspector go through the property to give you insight on the property and to give you insight into what issues you may run into. With this knowledge, you can more confidently know your answer to “Is it worth buying a fixer upper?” If you are still interested after the inspection, it is time to start your research.

Look up each recommended repair to know exactly what is involved. Be realistic about your skills and which projects you can likely complete yourself. For those projects beyond your available time or skill set, get quotes on repairs and renovations. Then work up a budget and timeline for your updates and repairs. Set up a separate fund to hold renovation money, in case issues arise or projects run long. Also, seek additional financing if you need more cash to complete projects and make the home livable.

Our forever agents at Adirondack Premier Properties know Adirondack communities and real estate trends inside the Blue Line. Contact us today for help in finding your own fixer upper or making any other Adirondack real estate dream come true.

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