Fixer Uppers can be thrilling and terrifying at the same time. The risk can be daunting yet the reward can be amazing. There is a lot of careful thought required before jumping into a Fixer Upper. So, let's get into some of those pros and cons.
Pro #1: The Return on Investment
Everyone knows that fixer uppers can provide a decent Return on Investment (ROI). In the case of fixer uppers, ROI is simply how much profit is gained after investing in the property. You obviously want to look for a property that will give you a decent ROI, but what does that look like? Figuring out potential ROI takes a lot of strategy mixed with a good amount of risk.
Begin by comparing the house value to the value of the homes around it. Then, consider how much would need to be invested into the property. Finally, based on surrounding comps, think about how much the home could be worth once it's renovated.
The most important component to all of this is identifying where you will need to invest your money in repairs. Ask yourself these questions:
What needs renovated?
Are the upgrades mainly cosmetic?
How is the electric, plumbing and HVAC?
What is the condition of the roof and windows?
How much work needs done in the bathrooms and kitchen?
Starting out, you'll want to find something that is primarily cosmetic updating and try to avoid homes with issues in electric, plumbing, HVAC, the roof and the windows. One of these issues wouldn't be terrible. However, a whole lot of these issues would really put you at risk for a larger investment than you intend.
Here is an example:
Let's say there is a house on the market for $150,000 and the homes around it have a value of $200,000-$250,000. The home was built in 1972 and everything in the home is original. However, the big things have been maintained well. You decide that the home will need about $25,000 in mainly cosmetic updating, a few new windows, and installing a few ceiling lights. This would be an example of a safe gamble house.
Con #1: The risk involved with return on investment
Now, with that being said, there is a huge risk that comes along with fixer uppers. You never know what problems you'll run into once you start opening up walls and demo-ing. With great reward comes a great risk.
Pro #2: "Making It Your Own"
Our home renovation experience redefined the meaning of “making it your own.” I discovered that “making it your own” isn’t just about color palettes & textures... its the fact that every square inch of our home now has a story. Behind every piece of tile, paint color, floor finish, piece of hardware, and light fixture there is a story of how it came to be. Behind everything in our home there were hours of planning, problem solving, communication, decision making, back breaking hard labor, and teamwork.
We can tell you about the time I accidentally spray painted Camden’s work boots while painting the cabinet doors. We can tell you about the nights we spent researching and making plans. We can tell you about how Camden drew diagrams late at night to figure out the electrical problems. We can tell you about the process we had to take to completed every project and all of the problems we ran into. We can tell you about all the times we made friends with the employees at Lowe’s because we were there so much, haha.
My favorite thing in our home will never be anything physical. My favorite thing this home renovation brought us is the experience that helped us grow closer together and made us stronger.
Home renovation isn’t just fresh paint and updated finishes, it’s the story of you.
Con #2: The Lengthy Process (patience, patience and more patience is required)
It's true what they say... everything in home renovation takes longer than you think. Even after careful planning, projects simply took more time than we thought in our head. And, a lot of tasks are contingent upon the completion of another task. Soooo an incredible amount of patience is required to take on a fixer upper.
So, there are a few of my personal pros & cons to fixer upper homes. I hope this helps!