Fixer Uppers: Pros and Cons

Sometimes the idea of a fixer upper seems like a goal that can be reached until you get into the process of actually doing the work, hiring someone to do the work and ultimately paying for the fixes. However, if you’re considering buying a house that needs serious improvements, here are a few things to keep in mind.

Benefits

There can be some major upsides to buying a home that needs improvements. For a first-time home buyer who may not be able to afford the type of home they want or the location they prefer due to demand, a fixer upper can allow that freedom. If you want to skip the starter home phase but fear you can’t afford a larger home, a house that needs some improvements may be a great fit while giving the additional space at an affordable cost. The flexibility in location, size, style and cost are key factors when someone chooses a fixer upper.

Disadvantages

Of course, a house that needs a lot of work comes with some drawbacks. For example, the time that your home is unlivable. If the improvements are structural or affect rooms like the bathrooms and kitchen, the home will not be able to be moved into until some of those improvements are finished. So, if you are on a strict timeline, that could cause an issue. Another disadvantage comes with finding a reliable contractor to do the work. You’ve probably heard stories from someone who hired a contractor that didn’t complete the job, made the situation worse or disappeared before the work was complete. That’s a reason you may have to wait for a contractor with a good reputation to be available.

Financing a Fixer Upper

If your goal is to purchase a fixer upper, you will want to talk to your loan officer about the best options for this type of home. There are loans specifically for home renovations that come with some stipulations such as the time frame the home must be completed, who completes the work and what’s included in the improvements. Your loan officer will help you look at your finance, credit score and the homes you want to see what type of loan you could be approved for.