Pros and Cons of Buying a Fixer-Upper

Buying a fixer-upper has become an increasingly common decision, with sales of these types of homes jumping up 13.4% between 2020 and 2021. But despite what you might see on HGTV and social media, purchasing a fixer-upper – and actually getting it into a livable state – is no easy task. 

All real estate purchases come with some risk, and how much risk you’re comfortable taking on depends on your preferences, your lifestyle, and your short- and long-term financial goals. As such, there’s a lot more to consider when you’re deciding to go all in on a fixer-upper than just its price tag. 

Here’s a quick look at the pros and cons of opting for a fixer-upper, all of which should stay top of mind when you’re deciding whether or not to invest. 

Pros of Fixer-Uppers

Any property could potentially be the property of your dreams with enough imagination, work, and money. For that reason, it makes sense that fixer-uppers are an attractive buy for so many, offering near-endless potential for those who have their eyes on long-term gains. 

Some of the biggest pros of buying a fixer-upper property include:

• Lower price tags – Depending on where you’re searching, the cost of a fixer-upper might be significantly lower than the cost of a move-in ready home. That could mean you end up getting more square footage for your buck, plus a lower down payment to boot.
• Less competition – Fixer-uppers definitely aren’t for everyone, so you probably won’t be up against as much competition on your search. And as a bonus, it’s possible the seller will be more flexible in coming down on price, since their buyer pool is limited.
• More possibility – Any home can be remodeled, but a fixer-upper in particular offers a huge opportunity for customization. Because when you’re already down to the studs, you’ve got a whole lot of options for what comes next. 

Cons of Fixer-Uppers

While the advantages above are quite attractive, it’s important to balance them out with some stark realities about what it really means to invest in a fixer-upper. After all, there’s a reason that so many buyers prefer to pay more if it means getting a turnkey home. 

Cons worth noting include:

• More up-front renovation costs – What you save in purchase price and down payment you may end up paying for in renovation costs. A mid-level kitchen renovation alone costs between $15,000 and $29,000, and that’s only one room out of many. 
• More unanticipated issues – Any home you buy can come with surprises after purchase. However, this is especially true with fixer-uppers, with costly problems possibly lurking behind every wall and floorboard.
• Longer timelines – It could be months – or even years – before your fixer-upper is a safe and suitable place to live. Make sure you’re realistic about timing, and if you’re in a hurry to move, have a comprehensive inspection done as soon as possible to identify any issues that will stand in your way.

Buying a fixer-upper with land or without requires a lot of due diligence and planning. Work with a financial advisor and an experienced real estate agent to determine if it’s a smart investment for you, and always consider both the pros and cons before signing on the dotted line. 

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