5 Reasons to Buy a Fixer-Upper Instead of a Perfect Place
Written By: Jaymi Naciri
Monday, January 21, 2019
.It costs less
ldquo;Fixer-uppers list for an average of 8 below market value,rdquo; said LearnVest. If yoursquo;re on a budget or are being priced out in your market, this is a way to get a literal foot in the door. How much depends greatly on the location. ldquo;Fixer-uppers in Phoenix have the smallest cash discount, saving buyers just 1,000 off list price. But you can save a lot of money in expensive markets like San Francisco, where fixer-uppers are discounted an average of 10mdash;giving homebuyers 54,000 in upfront savings for renovations on the median home.rdquo;
You may be able to finance your renovation
One of the major drawbacks of buying a home that needs to be fixed up is having to come up with the cashmdash;especially after yoursquo;ve just put so much money into your down payment and closing costs. There are a few different types of loans that package the mortgage with funds for renovations, and they often come as a surprise to buyers who have only focused on FHA and 30-year conventional loans.
ldquo;Whether you need a new roof or your kitchen is outdated, there is a mortgage thatrsquo;s right for your fixer-upper,rdquo; said Bankrate. Fannie Maersquo;s Home>
It gives you the opportunity to build value
With an already-updated home, ldquo;If a seller has redecorated or improved the whole place, that seller is reaping the benefit,rdquo; said Forbes. ldquo;If the homes value has been raised, the buyer is paying for it. Also, consider this reality: A seller who re-does a whole house in order to sell is not likely putting in the highest-quality materials. Theyre cutting costs to maximize profit. But if you buy a fixer-upper, you might be able to secure an undervalued property, improve it and get the benefit of the extra equity. Its a core real estate concept. If you can find the right property, this could mean thousands of dollars almost immediately.rdquo;
You can do renovations over time
There may be a few things you canrsquo;t live with in a fixer-upper, like the grungy carpet and cruddy plumbing fixtures, but no one other than design shows says your place has to be perfect the day you move in. Taking your time to make updates as yoursquo;re able gives you the opportunity to save money and recover from all the expenses of buying the home and moving in.
It allows you to put your stamp on it
When you buy a home that was lived in and fixed up by someone else, it reflects their taste and >
ldquo;One of the primary reasons people buy fixer-upper properties is for the opportunity to make the space their own,rdquo; said Green Residential. ldquo;Instead of purchasing a home in which someone else designed the layout, chose the materials, and dictated where different elements were placed, you can buy a basic structure and then take charge. Itrsquo;s like building your own home without having to go through the lengthy process of drawing plans and constructing it from the ground up.rdquo;
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