Even though TV shows frequently feature “fixer-uppers” that are magically transformed into dream homes, many people don’t realize just what’s involved in the transformation. Not, that is, until they’re the proud owner of what has turned out to be a money pit.
Agreed, it’s a great idea to buy a fix-up in a good neighborhood at a discounted price and turn it into the best property on the block by spending some time, energy, and money.
If the property qualifies, you may be able to access funding through an FHA 203K rehab mortgage, but outside of this program, the cost of repairs can be prohibitive.
Most potential buyers don’t know what repairs cost; what may look like a home in need of cosmetic work may actually require major repairs to the roof, plus electrical and plumbing upgrades, and possibly even structural work.
As well, it’s only a bargain if you can do much of the labor yourself. And then there’s the prospect of living in the middle of endless projects with dust everywhere.
Finally, a fixer-upper is not for every buyer. Time, resources, and ability are required, not to mention the credit score and income you’ll require to obtain financing.
And you need the ability to see through the mess and imagine what the home will look like finished.
As tempting as the purchase price is for a house in need of a little TLC, the buyer must decide whether the fix-up is the right fit, or a potential money pit.