Would you ever buy an old or “fixer-upper” home because it was cheap?

Question

Most people my age will never be homeowners. However, I’ve been peeking into houses on the market and there are some old or fixer-upper type homes that are under $200k or even under $100k. I figure if you get a home inspector and there’s nothing seriously wrong with the home, like mold, you’re better off paying $1000 mortgage payment on something in your name than $1300+ on a property you’ll never see the title to.
My plan is to save thirty grand at least for down payment on a small and outdated, but solid home and that way, it can be paid off probably within a couple of decades.

Anonymous · Accepted Answer

You're better off paying $1500 for something you own than $1000 for something you never will. Rent will only go up, if you maintain the home and screen tenants, it will lose value slower than inflation and you should see a monthly revenue stream. This is why you rarely see rent DECREASE even on places that should be condemned.

This being said, be aware that the older you get, the more problems you'll have. My boyfriend and i bought a fixer upper and we had to essentially rebuild from the inside out in the evenings after classes. It now provides us with a monthly net of $200 as we rent it out, but it will be a long time before we see an overall net profit on the property.

Most of all remember that those little personal touches only have a "value added" affect to you. Installing a $200 shower head or a $5000 refrigerator rather than options that cost half that will not change the rent price of an old home. The value there is primarily decided by the overall base condition of the home, Floorplan, and neighborhood. Don't make a caviar and bologna sandwich, it's still just a bologna sandwich.

Pink2000 · Accepted Answer

Absolutely. This is a home I would love to purchase. It’s a fixer upper but it’s 5 beds 5 bath with a pool and 3 car garage for less than $250k

hahahmm · Accepted Answer

Maybe. But houses that have a lot of issues are best evaluated by experts who actually know what to look for. The kind of inspector that banks/insurance use do not go into enough detail to be useful in this scenario. What they do is good enough if you're buying a well maintained house. You can have one inspector say a house has no issues & another inspector identifies some major issue or hidden issue. So best case you have a friend who has owned a home for a long time or someone who fixes houses up to look at the property for you.

Also how much it cost to fix a house up depends on what's wrong with it. A house that looks like it's in mint condition could cost a lot of money depending on the details. So I'd be real careful about fixing a place if you have no experience being. a home owner already.

lightbulb27 · Accepted Answer

I've done that for a rental unit. I've flipped a few properties. If you know what you are doing, it's fine.

don't under estimate the cost of repairing stuff. if you don't know how to examine a property, pay someone to do it and walk through the property with them. Inspectors mis stuff... like chimney problems which can be expensive. Make sure the big stuff is ok, like foundations.

as such, you can slowly do the work yourself if you want and build equity.

living in a construction zone can be stress indicing. ideally, you want to come home to peace where you can re-charge for work. I did that for years and kinda wore me down. But young, you can likely get away with it, especially if you are making $ doing it.

Avoid paying banks 6-8% if you can do it. that's a lot of $ wasted.

OfMiceandMen · Answer

Yes, my first two homes were like that. Bought a fixer upper when I got out of University. Got it for a 125K and sold it for 275K (put about 5K into it plus labor) when I was done, bought the next house for 175K (put 10K into it) and sold for 325K. You do not have to Capital Gains Tax on your principle residence in Canada.

I used some of the money I made from those two houses to purchase my existing house and I've flipped three other cottages along the way, making over a million in profit once taxes etc. were taken off. I put about 10K into each cottage. Cottages are not your principle residence, so you have to pay capital gains tax after selling. Less of a profit margin sometimes, but the waterfront side made up for the tax loss.

matchrestore · Answer

I did. Bought a 4 bed 1.5 bath house built in 1896 for $67k. Put a ton of sweat equity into it, a long with hiring a few subcontractors. It's now worth around $220k. I definitely haven't put $150k into it so I'd say I've come out well, but it's also been a struggle living first in a house that is barely livable and then in a construction zone for almost a decade. Was it worth it? For the equity gained and how that sets us up financially, yes. Would I do it again? Not without access to more capital to get renovations done in a much more timely fashion.

Matt-G · Answer

If you plan to do it, Check 9 things. Roof, Guttering, Sewerage, Electrics, Plumbing, Ground rent situation, Foundations / settlement or evidence of shifting or foundation decay, Ground water affecting the area of the property, and Gas connections inside and outside. The rest is visual but those 7 things need to be looked after properly.

exitseven · Answer

I bought one as a vacation home. I have owned it for 14 years. We have done a lot of work on it. I refinished all the floors and painted the interior. I replaced windows and the front door. I hired somebody to put new siding on it. I bet i could get twice what I paid for it.

Redstang88 · Answer

That’s probably what I’ll end up doing, once I move outta the city. Even a fixer upper anywhere near here is way over a million

msc545 · Answer

no. I don'twant to live in a construction zone.

Agape93 · Answer

Absolutely. That's how my house was. Had to repair the roof, rebuild the porch etc.

nolabels · Answer

Both of my houses were built new for me, but If I was young again and if the home fit my needs but just needed some work, I'd definitely consider it.

"Sweat" equity can build quickly if you're smart about it.

GoodGuyBreakingBad · Answer

Save money and in 10 years things should look good for you.

WhitneySnow · Answer

That sounds like a great plan

ShesRad80 · Answer

i bought one and over the course of 5/6 years rehabbed it myself now its worth 4 times the value.

Anonymous · Answer

No, I wouldn't buy it they government are going to steal it away in a few years

Anonymous · Answer

My mom is saving money for me, so I hope to buy my own home before the age of 30, if possible.

Would you ever buy an old or “fixer-upper” home because it was cheap?

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