10 Pros and Cons of Buying a Fixer-Upper in the Killeen Area
Are you debating whether to buy a fixer-upper or move-in ready home in or around the Killeen, Texas, area? Fixer-uppers come with more responsibility compared to move-in ready homes. And while they tend to be cheaper, that cost is usually made up by the amount spent on necessary repairs and renovations.
So, how do you know if you should buy a fixer-upper? In this post, we’ll discuss some of the pros and cons you should be aware of when looking at this type of home.
Who Should Consider Buying a Fixer-Upper?
Fixer-uppers are an excellent choice for someone looking to flip the property to make a profit. But they’re also great for someone looking for their dream home. If a homebuyer really likes the location or structure of a property and is willing to put in the necessary work to improve it, then a fixer-upper might be the right fit for them.
The first step in deciding whether to buy a fixer-upper or move-in ready home is educating yourself on the potential risks and benefits of fixer-uppers.
Pros of Buying Fixer-Upper Homes
The first major benefit of a fixer-upper home is that the asking price and down payment are significantly less compared to move-in ready homes. While this may seem like a good deal, it’s important to consider how many repairs and renovations will be necessary for the home.
1. Price Point
If it requires extensive work to bring it up to standard, calculate how much those costs will be and add them to the asking price.
A good starting point is to get the home inspected to see what needs to be fixed. This will give you a more accurate picture of the home’s worth. But if you have the time and money to make these repairs, the lower asking price might be worth it.
2. Control and Customization
Fixer-uppers give you the ultimate creative flexibility to design your home and customize it how you want it to look. You’re in charge of every aspect of the renovation process, from what materials and colors are used to how the rooms look and what features you want.
You also control who helps you work on your home, so you’re free to hire any contractors you prefer. This creative freedom is a huge benefit for anyone looking to make a truly unique home they can call their own.
3. If You’re Handy, You Can Save Money
If you can do the repair and renovation work yourself, then buying a fixer-upper could be a good fit for you. As long as you have the time to do the work and money to purchase the materials, you’ll end up saving money by not hiring contractors.
4. In Some Cases, You Can Finance a Fixer-Upper with a Loan
Fixer-upper loans cover the construction and renovation costs and the mortgage. However, these loans typically only apply to homeowners who intend to fix the home and then live in it, not flip it.
There are several types of these loans, including an FHA 203(k) loan, VA Rehabilitation loan, or options from Freddie Mac or Fannie Mae.
5. Less Competition
Lastly, if you’re deciding whether to buy a fixer-upper or move-in ready home, another benefit to consider is that fixer-uppers have less competition. This means you have a higher chance of getting the home you want without worrying about offers from other buyers.
Cons of Buying Fixer-Upper Homes
6. Renovation Costs
As mentioned above, the biggest downside to fixer-uppers is the cost of renovations. Depending on how much work is necessary, the cost of repairs can add up quickly.
Renovation costs will depend on whether the home just needs some cosmetic repairs or if more extensive structural work needs to be done.
Closely related to renovation costs is budgeting. When it comes to fixer-uppers, you’ll need substantial liquid money to purchase materials, pay your contractors, and deal with any issues that come up suddenly during the process.
For this reason, not only is it important to create a realistic budget from the start, but you also need to be prepared for any unexpected issues that could result in additional costs.
So before buying a fixer-upper, be sure to ask yourself whether you have the ability to take care of potential additional costs. Can you really afford to see the project through to the end? Will you need to do the work little by little, or can you get it all taken care of upfront?
8. Be Aware of How Much Value You’re Actually Adding
If you’re buying a fixer-upper with the intention of reselling it and making a profit, you’ll need to calculate and be aware of exactly how much value your renovations are adding to the property.
Otherwise, you might find that when it comes time to sell, the work you did actually didn’t increase the value of the home as much as you’d hoped. As a result, you end up falling short of your target profit.
9. Hidden Issues
Fixer-upper properties also have a higher risk of hidden structural issues, like sinking foundations, leaky roofs, or internal damage from rodents or pests. This is why hiring a home inspector is crucial when buying a fixer-upper, so you can make sure there are no surprise costs you’ll have to deal with.
10. Working with Contractors
The last major risk of buying fixer-uppers is hiring and working with contractors. Unless you can do everything completely on your own, you’ll likely need to hire a contractor for at least one aspect of the repair work.
But managing contractors can be stressful, especially if you’re working with multiple groups at once or dealing with a long-term project that spans several months. Be sure you’re prepared to handle the coordination and planning involved in having multiple contractor teams working on your property.
The Salas Team Can Help You Buy a Fixer-Upper or Move-in Ready Home in the Killeen, Texas Area
Your Home Sold Guaranteed Realty - The Salas Team can help you decide whether to buy a fixer-upper or move-in ready home in the Killeen, Texas area. We have a special free report, “Fixer Uppers: Myths & Facts – What You Should Know Before You Buy”. Click here to learn more.
Shelly Salas and her team of professional agents have years of experience serving home buyers and sellers in Killeen, Austin, Round Rock, and the surrounding communities.
Their extensive database of available homes is continually updated with the latest listings, so you’re guaranteed to find your dream home.
On top of that, Shelly and her team are so confident their system will work for you that they offer a Buyer Cancellation Guarantee. With this guarantee, you can buy a fixer-upper home as risk-free as possible.
To learn more about working with Shelly Salas, call 855-331-7653 or fill out the form below.