Buying a home is a considerable expense. There are several things you can buy on a whim, but a home is not one of them. Buy the wrong kind of home, and it will knock a massive hole in your finances that will take you years to recover. Buyers make those kinds of mistakes when they don’t get enough information before purchasing. So in this piece, we’ll compare a move-In ready vs. fixer-upper to see which might be a better fit for you.
The home’s purchase price is the number one consideration for the typical homebuyer. But the sales price is not the only essential cost to think of when buying a home, says RentEasy VA. The cost of fixing the house and maintaining it may be more valuable. When you add those costs, a home that looks affordable at first may suddenly become unattractive.
Buying a fixer-upper versus a move-in ready home
For most homebuyers, the only kind of home that exists is a move-in ready home. Move-in-ready homes are attractive because they require very little work. But this convenience may come at a cost; move-in-ready homes are overpriced. The alternative is to buy a fixer-upper home: cheaper homes that need a lot of TLC to make them livable.
If you’re in the market for a new home, you may find yourself caught between the relative safety of buying a move-in-ready home and the low cost of the fixer-upper. How can you decide on the right home to buy? This article will explain the factors to consider between buying a fixer-upper versus a move-in-ready home.
Pros and cons of buying a fixer-upper
It is cheaper: This is the number one reason for buying a fixer-upper. Fixer-uppers, on average, can be as much as 8% less than the market value of move-in-ready homes.
Lower taxes: Given that the tax on a property relies on its purchase price, you will pay less in taxes when you buy a fixer-upper.
You can customize it: You can renovate the home to your taste, and your total costs will still be less than the sales price of the move-in-ready home.
Instant value: After renovation, the home may be worth more than the combination of the sales price and renovation cost. You can sell it right away for a profit.
Possibility of unpleasant surprises: Even with a thorough home inspection, there is a chance that you will discover crucial problems with the home. That could significantly increase your costs.
Hard to budget: It is not easy to accurately estimate the cost of renovating a fixer-upper. Costs can escalate till it erodes all the advantages of buying a home.
Planning is difficult: It is hard to make a plan and stick to it because there are so many unknowns when dealing with a fixer-upper.
You need temporary accommodations: You will need a place to live while renovating the home. This additional cost will reduce any potential savings on the house.
Trouble getting financing: It is harder to obtain funds for a fixer-upper home. That is due to the amount of risk associated with such properties. Since most lenders won’t finance your purchase, you may use more expensive loan options.
You need some level of expertise: If you don’t have experience renovating homes, buying a fixer-upper will be challenging. You could be setting yourself up for huge losses.
Pros and cons of move-in ready homes
You have more control: The predictability of buying a move-in-ready home means you have more control over the entire home buying process. The risks are lower, so you have fewer reasons to be anxious.
You can move in immediately: You can move into your new home as soon as you complete the purchase. That will save you the cost of living in a hotel while waiting to finish the renovations.
It is easier to plan and budget: It is less difficult to determine the physical condition of a move-in-ready home. That makes it easier to create and stick to your budget. You also have a clear timeline for completing the purchase.
You cannot customize it: The home will be designed to suit someone else’s preferences. But you have to live with that because making significant alterations to the property won’t make financial sense.
You will eventually have to do renovations: Renovation will be necessary at some point. When you buy a move-in-ready home, you don’t avoid renovations. You postpone it.
Do you have what it takes to buy a fixer-upper?
When comparing a move-In ready vs. fixer-upper, answer these questions:
- Firstly, do an honest assessment of your time and abilities.
- Secondly, you need a team of trusted and competent experts by your side; a home inspector, structural engineer, and building contractor.
These people can give you advice that will save you a lot of headaches and money.