Should You Buy a Fixer-Upper? Pros and Cons of DIYing Your Digs

The low price tag of a fixer-upper home is tempting for many homeowners, and it could make it a good investment.

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But properties that need a lot of work also come with some drawbacks. Compare the pros and cons to help decide whether you should buy a fixer-upper.

What Are the Pros and Cons of Buying a Fixer-Upper?

Fixer-uppers usually need a lot of work to bring them up to code, make them livable and get them looking the way you want. They can range from ugly designs that just need cosmetic updates to complete gut jobs that have structural and mechanical issues. Here are some pros and cons to help you decide.

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Pros of a Fixer-Upper

If you're up to the task of remodeling your new home, a fixer-upper could be a good match for your housing needs. Possible benefits of a fixer-upper include:

• Lower up-front cost: A home that needs a lot of work saves you money on the purchase. That can leave you more money to make changes to the home.
• Customization options: If you're renovating the house, you get to choose all the materials, colors and details. It's a good way to get the look you want without building a new home.
• Less competition: Not everyone is up for months of renovations, so you might not be outbid if you're looking at a fixer-upper. It can be a good alternative if your market frequently has bidding wars for move-in-ready homes.
• Increased home value: By fixing up a lower-priced home, you increase its value quickly. While buying a fixer-upper solely as an investment can be a smart option, you also have to watch your budget and make sure you don't spend more on your renovations than the remodeled home is worth.
• Entry into a desirable neighborhood: If you can't afford a new or already-remodeled home in a desirable neighborhood, a fixer-upper could be your ticket into a nicer neighborhood that would normally be out of your budget.
• Renovation loan option: You might be able to get a renovation loan, which combines the mortgage and money for repairs. This can help you get into a home and do the necessary repairs without shelling out a lot of cash up front. There are limitations, however, so make sure you understand how the loan works.

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Cons of a Fixer-Upper

A home that needs a complete redo isn't for everyone. Considering the cons can help you look at the situation logically to decide if you're up to the task. The possible negatives of going with a fixer-upper include:

• High total cost: Even though you're getting the home for a bargain price, your overall costs are likely to be high. Costs are especially likely to skyrocket if the home has structural or mechanical issues. Budgeting and leaving room for unexpected expenses is important for this type of home purchase.
• Surprise problems: You don't always know the full extent of the issues with a home that's in rough condition. You can see the cosmetic and structural issues that are highly visible, but a lot can be lurking behind walls, and there may be mechanical issues, which could result in unexpected repairs. While you could buy a fixer-upper house without an inspection, there may be even more repairs you don't know about before the purchase.
• Move-in delays: When a home needs major work, you won't be able to move in right away unless you want to live in a construction zone. If you wait to move in, you could be making two housing payments each month.
• Stress: Completely remodeling a home is often a very stressful situation. You have a lot to manage, and running into problems and delays adds to your stress levels.

Should You Buy a Fixer-Upper House?

Should you buy a fixer-upper? Start by thinking seriously about the pros and cons. Decide if the benefits outweigh the possible drawbacks. It helps if you have some renovation experience and can do part of the work yourself. Buying a fixer-upper is also easier if you're a planner and realistic about keeping the project on track. Ultimately, it depends on how much you can handle in terms of stress, surprises and high potential costs to get the home the way you want it.