Homes that need renovations will have lower asking prices, but are they worth the initial savings? With the right eye and a little elbow grease, fixer uppers can actually bring substantial benefits besides the lower purchase price. These homes offer a chance at getting more for you money, all on your terms.
A reduced purchase price can put your budget into a neighborhood that you thought was too expensive, or a house that’s larger than you expected. Fixer uppers can be found in all shapes and sizes and in all zip codes.
Homes that need work are probably the easiest to negotiate aggressively. Get some estimates for the necessary renovations to get an idea of the total investment, then compare that to the asking price. Is the owner expecting too much? It’s worth noting that the owner may be especially eager to sell. Real estate experts agree that buyers should not be afraid of using this advantage to negotiate the best price.
Renovating on your terms offers more than just cosmetic benefits. When the dust has settled, you can save money by fixing up a home yourself rather than paying top dollar for a perfect condition home and then making your own custom changes afterward.
Of course, it can be most cost effective to find a home that checks off all your boxes from the start. The local experts at Leading Edge Real Estate can help you determine where to get the most bang for your buck, whether that's a fixer upper or not.
Some people avoid fixer uppers because they do not have the liquid assets to pay for extensive renovations. For this situation, it’s worth looking into home renovation loans, which simply means a mortgage that acts a lot like a line of credit. All you need to do is demonstrate that the money was spent on repairing or improving the house.
Equity simply means the appraisal value of your home minus the mortgage balance. You can build equity by doing anything to increase the value of your home, so fixer uppers make great candidates for building equity. More equity benefits you by making it more likely for you to refinance to more favorable terms, or even take out a loan against the equity if you ever need to.
Fixer uppers may not be for everyone, but they can truly be diamonds in the rough. For those interested in doing a little work for higher upside, it’s worth looking at as-is or reduced priced homes. While the additional renovations can be stressful, the final outcome will surely be something to enjoy for years to come.
Meghan Belnap is a freelance writer who enjoys spending time with her family. She loves being in the outdoors and exploring new opportunities whenever they arise. Meghan finds happiness in researching new topics that help to expand her horizons. You can often find her buried in a good book or out looking for an adventure.