Fixer-Upper vs. Move-In Ready: Pros and Cons
Whether you’re renting or looking for your first home, there are always diamonds in the rough. Nonetheless, some eager homeowners can’t wait to get out of their old grungy apartment and demand a comfortable place they can call home. As such, many are left with the huge dilemma of buying a move-in ready home or a fixer-upper. There are certainly pros and cons of each, and the final decision will largely depend on your unique situation.
With this in mind, we’ve outlined the primary considerations for each choice. After seeing both sides, you can feel confident in making the right choice for your dream home.
1. Discounted Prices
Unquestionably, one of the biggest advantages of buying a fixer-upper is the price. Fixer-uppers give eager homeowners the chance to own their own property even if they can’t afford those move-in ready homes so many of us deeply desire. Homes that need work are almost always priced accordingly, as the owner knows the home needs work before it can be sold and/or occupied. Therefore, the sale price is usually below the potential market value. As such, buying a fixer-upper makes perfect sense for those planning to move in a few years.
2. Tax Savings
Property taxes are based on the home’s sale price. Therefore, your biannual property taxes will be less if you buy a fixer-upper as opposed to a new home. Additionally, according to American Financial Resources, Inc., some fixer uppers also allow the owners to claim an investment tax credit for qualified rehabilitation costs. This typically applies to historic homes that are listed on the National Register of Historic Places. There are other ways to save money when it comes to obtaining a loan for a fixer-upper. For more info, please see Renovation Financing.
3. Design Choices
Besides money, the other key advantage of buying a fixer-upper is a blank canvas. If you go into a deal knowing you’re going to spend money to fix it up, you have the freedom to design the house however you wish. If want an open concept, you can do it. If you want to go bold in the kitchen, you can do that, too. Fixer-uppers let you tailor your house to your exact tastes. While it’s certainly more work, this power can not be underrated.
1. Extra Work
There’s no doubt that fixer-uppers require more work than move-in ready homes. Not only will you have to research local contractors and work with them during the remodeling process, but to save money, many eager homeowners get their own hands dirty. Removing an old toilet, painting a bedroom, or demolishing that really ugly living room may sound like a chore, but many find it invigorating. Either way, prepare to get to work.
2. Extra Time
Move-in ready homes cost more because they are just that. As soon as you unpack your hundreds of boxes, your home is ready. The same can’t be said for a fixer-upper. Oftentimes, the remodeling process can take months until the home is move-in ready. This is especially troublesome for those working with an expiring lease. Furthermore, we know how exciting it is to move into a new home. Sadly, that excitement will have to take a back seat if you purchase a fixer-upper.
In any fixer-upper, there will always be surprises. You can’t know what’s behind those walls or around those pipes until you open them up and get to work. Yes, similar surprises can occur with move-in ready homes, but as you can imagine, those homes are much more updated than your average fixer-upper.
4. Remodeling Costs Could Outweigh Savings
It is vital to do your research before you purchase a fixer-upper, as there are rare occasions where the remodeling costs could outweigh your initial savings. So whether you have to redo your bathroom or renovate the kitchen, make sure you look up the average costs to remodel every room before you write that big check.
Move-In Ready: Pros
1. Easy Transition
Move-in ready homes require little—if any work—As soon as you move in, all the work is done. There is (hopefully) no painting,no demolishing, no removing toilets, and no maintenance. Move-in ready homes let you enjoy the comforts of your new home as soon as you purchase the property.
2. New Design Elements & Technology
There are certain design elements that seem to come with every new or remodeled home. As opposed to fixer-uppers, new homes come with design elements today’s lifestyle demand. Those elements include: open floor plans, walk-in closets, barn doors, and hardwood flooring, to name a few. New homes are also equipped with the latest technology built right in like alarm systems, speakers, Internet wiring, and cable, saving you lots of time and money.
3. Simpler Financing
As referenced above, one can secure financing for a fixer-upper, but a home loan for a move-in ready house may be easier to obtain. Your odds will of course depend on your credit history, down payment, residential income, and more, but obtaining a 30-year fixed mortgage will be easier to attain.
4. Energy Efficient
Newer homes tend to be more energy efficient. Not only will an energy-efficient home keep you warmer in the winter and cooler in the summer, but it will also save you thousands of dollars in utility bills over the home’s lifespan.
Move-In Ready: Cons
Move-in ready homes are almost always more expensive than fixer-uppers. If they weren’t, no one would ever buy a fixer-upper. As such, if you want to buy a move-in ready home, expect to pay more than you would for a fixer-upper.
2. Little Customization
As a dream home, you want it to be perfect. You may love the master bath and the hardwood flooring, but your husband may have a few issues with the brand new kitchen. Either way, there will always be some give and take when it comes to buying new homes. If you’re not into the whole DIY scene, the chosen designs will have to stay as is. Unless you want to pay to remodel or get your hands dirty, move-in ready homes give you little freedom to customize the home as you wish.
3. Architectural Details
Newer homes rarely offer the unique architectural details older homes present. While this may not be an issue for some, others love those distinct details outside the home. Keep in mind, few homeowners—if any—change the look and feel of the home exterior (excluding landscaping, pools, etc.).
Dream homes exist all over the world. Some may see it under that grungy looking Victorian, while others see it in newer construction. Either way, as you have seen above, there are plenty of pros and cons in purchasing a move-in ready home or a fixer-upper. Which one will you choose?
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