There are several questions you should ask yourself before deciding on a property that needs many repairs or renovations (commonly called: fixer-upper) or a move-in ready property.
Are you handy? Do you know contractors or other trades people? Do you like projects? It used to be that people that were willing to take on a ‘project’ could get a bit of better deal. However, now with the stiff competition and lots of contractors who are also competing for a declining number of homes in need of renovations, these types of homes are just as popular.
While in theory you are paying less than a house that is already renovated, it does require different financing. You might be purchasing the house for a smaller value but you will need to have access to more liquid cash later to complete the tasks. Not to mention there is often a long wait time to secure a contractor who is right for your property.
Below are the pros and cons between a Completed House and a Fixer-Upper:
Completed House
Pros:
Move-in ready
Most people are able to get a mortgage for a higher amount than they have access to cash for
Not having to live through construction/delays etc
Superficial changes can help the space you love e.g. good furniture or personal decorations
Cons:
Might not be to your style or there could be elements you might wish you could change
May be more expensive depending on the area and the kind of property you are looking at
Fixer-Upper
Pros:
Able to create the space you want
Could possibly pay less for the upgrades if done DIY depending on your experience
Can add value to your property by updating key areas including the kitchen or bathroom
Personal satisfaction when completed
Cons:
Long wait times for contractors
If you are doing the work yourself – longer times until completion
Surprises (situations that might not have been accounted for)
Costs could outweigh savings
May be stressful if continuing with normal work days during this time
If you would like to discuss the process in more detail or would like a referral to a particular tradesperson, please contact me.
If you’re looking at a condo, please click here for some key condo questions that will help in your decision making.