How to buy a fixer-upper house
Learn more about the pros and cons
We’ve all seen those home improvement shows where they buy an old house that needs work and transform it into an amazing home. It can be an appealing option, because houses that need fixing up are usually more affordable than homes that are move-in ready.
Is buying a fixer-upper home right for you? Check out these pros, cons, and tips to help you decide for yourself!
What are the pros of buying a fixer-upper house?
- More affordable. A fixer-upper is typically less expensive than a ready-to-move-in home. Your down payment and monthly costs will also be lower, which can leave you more cash to pay for renovations.
- Lower taxes. Since you are buying a home with a lower value, the property taxes will likely be lower, too. However, your home’s value could be reassessed after you complete renovations.
- More customizable. A fixer-upper puts you in control of how you want your home to look. You choose the tile, flooring, colors, and layout in each room to fit your needs.
- Less competition. Fewer homebuyers are interested in a fixer-upper. This can help you pay a lower price and give you more ability to negotiate.
What are the cons of buying a fixer-upper house?
- Cost of renovation. An entire house remodel can be expensive. Depending on how much work you need to do, you may end up spending more money than you would have if you had bought a ready-to-move-in home.
- Unknown expenses. With an older home, you may uncover issues that your home inspection did not find. These surprise problems could put a strain on your budget.
- It takes a long time. Fixing up a home can take months—or years—depending on the work that needs to be done, as well as the money you have to do it. This can mean living in a construction zone or paying for temporary housing.
- Added stress. Renovations can be stressful, whether you are doing the work yourself or paying contractors to do it for you.
What are tips for buying a fixer-upper house?
- Get the home inspected. While an inspection might not find every problem, it can help you identify problems and estimate the cost of repairs. A home inspection can also help you prioritize what work needs to be tackled first.
- Negotiate. With a fixer-upper, you often have the upper hand during negotiations. The seller is less likely to have many offers and should be more willing to negotiate.
- Estimate the costs. You should consider the cost of the home, as well as the estimated cost of renovations. You wouldn’t want to buy a home, then realize you can’t pay for all the work that needs to be done.
- Decide what you can do yourself. You can save money if you tackle some of the improvements yourself. However, it’s best to hire a professional for structural, electrical, and plumbing work.
Whatever you decide, we’re here for your purchase or refinancing needs, and we wish you the best of luck with your fixer-upper home!
Last reviewed and updated January 2024 by Freedom Mortgage Corporation.