While some people prefer to buy move-in ready properties that don’t require a lick of work, others opt for fixer-uppers instead. This kind of hands-on, roll-up-your sleeves investment isn’t something for everyone but it does have some advantages.
Before financing a fixer-upper, carefully assess all your options to see which one is the most cost-effective.
Some reasons to buy a fixer-upper include:
- 1. You’re working with a clean slate. Buying a fixer-upper gives you the opportunity to create your dream home. Everything from the kitchen cabinets and the countertops to the actual layout of the home can be picked out by you. While this requires a great deal of work, the finished product will be just what you envisioned. It may even exceed your expectations.
- 2. You’ll know that the foundation is sturdy. Finding out after you've purchased a new home that it has structural issues is a nightmare. But if you fix the cracked foundation, the faulty wiring, the outdated cooling and heating systems, the old plumbing, you can be confident that when it’s all said and done, your home will be good as new and you won’t have to worry about these kinds of problems for a long while.
- 3. You’re able to move into a more expensive neighborhood. As we pointed out above, the purchase price of fixer-uppers is typically much lower than move-in ready homes. Consequently, that ideal neighborhood where you’ve always wanted to live but thought was significantly out of your price range, may be within reach.
- 4. You’ll get a good return on your investment. When you put money into a home to make upgrades, the property value will increase. As a result of your sweat equity, when it comes time to sell your home, you could earn a handsome profit. Just remember that some properties aren’t worth the investment, so it’s best to look at the purchase price of other homes in the area and honestly assess your renovation budget before you take up your hammer and saw.
Think that a fixer-upper is the right choice for you?
A 203(k) rehab loan is designed specifically for home buyers who are looking to purchase a fixer-upper.
Learn more about this kind of loan here.