My husband and I have just purchased our third 1970’s home, and it is an ugly, outdated and old home. Over the span of years for each home, we transformed both inside and out. Our third 1970’s home is no exception needing lots of cosmetic updates. Are we hoping to be on an HGTV show? No. While my husband and I enjoy all the home flipping shows, our personality is not suited for television, but we have other reasons for tackling a fixer-upper.
Affordable
Instead, we buy ugly, outdated and old homes because it is what we can afford. We live in a metropolitan area where new construction is far and few between. When new construction is available, it is extremely expensive, townhomes or condos. In our area, there are a few new construction beautiful farm style homes, but they are more than twice the cost of the home we just purchased. Personally, we prefer a home with a yard therefore, condos and townhomes do not appeal to us.
Equity
Because we live in an area that is growing and is running out of space, our home values are increasing. When we buy an ugly, outdated and old home, we can buy the home well below the market value of nearby renovated homes. When we sell our ugly home in a much prettier and updated condition, it increases the equity and the return we receive on the home.
Make It Ours
We love making all our own choices in a home. We find it difficult to consider purchasing a home with new cabinets, countertops, floors or other big items in the home that were not our preference. For example, we once visited a home that proudly showcased their quartz countertops. Unfortunately, the sellers picked a non-neutral color and placed them old outdated cabinets. It would have been smarter to have priced the home to similar comparable unrenovated homes. The particular home needed a significant amount of other work that buyers had to take into account, and it took a while for them home to sell. The buyers that finally agreed to purchase the home did gut the entire kitchen including the quartz countertops that the sellers had tried to showcase.
Less Interest Paid to Banks
For most of the population, purchasing a home requires a loan. Buying a comparable but completely renovated home in our area could cost us as much as $100,000 more. A higher purchase price often requires a larger loan and more interest paid over time to the bank. A larger loan also means a higher monthly mortgage payment. The house will require funds to update it, but using cash instead of a loan will eliminate wasted funds on interest payments.
Thinking about buying a fixer-upper and thinking about tackling some of the projects yourself? Numerous blog and video tutorials exist on the web from other experienced DIYers. Read this post first if you are tackling a fixer-upper for the first time.
