Should You Buy a Fixer-Upper as Your First Home?

Getting a bargain on a home in need of repair can seem like an opportunity to save money. For many first-time buyers, fixer-uppers feel like the last way into desirable neighborhoods. Lower prices and less competition can be appealing, especially in a hot market.

However, these homes come with risks that may not always be apparent in the listing photos. Renovations often cost anywhere from $15,000 to over $200,000, and they rarely go as planned. Projects can span months or even years. The work is exhausting, the decisions nonstop, and the surprises expensive.

Let’s discuss what it truly means to buy a fixer-upper as your first home. We’ll cover cost tiers, pros and cons, financing options, and a realistic, step-by-step process to help you decide if this path aligns with your budget, lifestyle, and long-term goals.

What Exactly Is a Fixer-Upper?

When using the term “fixer-upper,” it can refer to a house that requires only cosmetic upgrades or one that necessitates full-scale renovations, involving the tearing out of walls or rebuilding from the foundation up. The level of work involved and the estimated price range are the first steps to deciding what kind of fixer-upper you can handle.

Here are the three main categories of fixer-uppers:

• Cosmetic Level ($5,000–$100,000): These homes require surface-level updates, including painting, new flooring, lighting fixtures, kitchen or bathroom upgrades, and landscaping. The bones of the house are solid, and the layout doesn’t need to be changed, but fixtures are dated. These projects are more DIY-friendly, and projects can increase value without overwhelming the buyer. Many first-time homeowners who are handy or budget-conscious start here, seeing it as a great opportunity to create “sweat equity.”
• Systems Level ($15,000–$50,000): Once systems need work, the cost and commitment increases. These renovation projects are functional upgrades that aren’t always visible (and don’t have a strong impact on property values) but are crucial for livability. They include HVAC replacements, rewiring outdated electrical systems, replumbing, or replacing a leaking roof. These projects usually require licensed professionals. They add some value, but not always as much as they cost. However, they’re necessary to bring a home up to code and make it safe.
• Structural Level ($30,000–$100,000+): When homes need major structural repairs like foundation reinforcement, full roof replacements, room additions, or gut renovations, the costs are high and the renovation timelines are long. These are the most expensive and riskiest types of fixer-uppers. Most of your budget in these projects will go toward making the home livable, not toward the stylish finishes that make Instagram-worthy reveals. Structural upgrades often don’t offer strong returns on investment, especially for first-time buyers with limited cash and no renovation experience.

When evaluating a fixer-upper, buyers need to understand where it falls on this scale so they can estimate the cost and time commitment, as well as the risk of going over budget. Any home may look manageable at first glance, but carry hidden issues that push it into a higher-cost category. Getting clear on the scope of work before you buy can help you avoid a financial project that spirals out of control.

Why First-Time Buyers Should Consider a Fixer-Upper

Buying a fixer-upper house can help you save money, but many first-time buyers also want to get into a neighborhood where they couldn’t afford a fully renovated property. While fixer-uppers aren’t always easy, they do open doors to opportunities that would otherwise be out of reach.

If you’re prepared, buy strategically, have access to quality vendors, and can afford the renovation costs, buying a fixer-upper can lead to higher equity levels and a more customized home.

Lower Purchase Price and (Potentially) Less Competition

Fixer-uppers usually come with price tags that reflect their condition. On average, listing prices are 20% to 30% less than comparable move-in-ready homes in the same neighborhood. That lower upfront cost can make a big difference for first-time buyers trying to stretch their budget or keep their monthly mortgage payments manageable.

Furthermore, many first-time buyers are unwilling to undertake renovations because they lack the time. As a result, fixer-uppers can have less competition and fewer bidding wars, giving you more negotiating power.

However, this isn’t always true. In hot seller’s markets and when home prices are rising, a fixer-upper can receive nearly as much competition as move-in-ready properties, as investors and flippers compete for the opportunity.

Access to Better Neighborhoods

Buying a fixer-upper can make it possible to buy in areas that would otherwise be out of budget for most first-time buyers who have less funds available for their down payment.

Whether it’s a highly rated school district, a shorter commute, or a walkable community, buying the “worst house on the best block” is one way to affordably land in a better location. Over time, the neighborhood’s value can boost your home’s equity even more.

Build Equity

When you make smart improvements, you increase your home’s value, sometimes significantly. Whether it’s updating the kitchen or adding curb appeal, renovations can deliver a strong return on investment.

And if you’re doing some of the work yourself, you’re earning sweat equity—a way to build wealth through hands-on effort while living in your own space.

Customization Control

One of the biggest perks of a fixer-upper is the ability to renovate your new home to your needs and preferences. You decide the design, layout, materials, and pace of renovations.

Instead of paying a premium for someone else’s tastes or upgrades, you get to shape the home to fit your lifestyle and personality. For buyers who want a custom feel without new-construction prices, this can be a major win.

Why First-Time Buyers Should Avoid Fixer-Uppers

Can you save money with a fixer-upper? Absolutely. But they also come with serious risks, especially for first-time buyers. Without prior homeownership experience, managing a renovation on top of the added responsibilities that come with homeownership can quickly become overwhelming.

That’s why many experts caution against this route for buyers just starting out because of the following reasons-

Lack of Homeownership Experience

Owning a home comes with a learning curve. If you’re a first-time buyer, you’re probably still figuring out how to handle routine maintenance, deal with unexpected repairs, and manage household systems.

Adding a major renovation and living in a construction zone can multiply the stress and increase the chance of mistakes. It’s easy to underestimate how much time, energy, and decision-making goes into even small projects.

Significant Cash Requirements Beyond Purchase

If you’re buying a fixer-upper, the home purchase is only part of the financial equation. Renovations usually require tens of thousands of dollars beyond your down payment and closing costs. In some cases, essential repairs like plumbing, electrical work, or roof replacements must be completed before the home is even safe to live in.

Buyers taking on renovations will need substantial reserves or access to a post-close loan. Even then, they could end up stuck—unable to move in, move forward, or sell if they can’t afford to finish the project.

Living in Construction Chaos

Renovating while living in your home might sound doable at first, but the reality is often messy, loud, and disruptive. Many buyers underestimate how exhausting it can be to live in a space filled with dust, noise, and unfinished rooms.

In more serious renovations, buyers may need to pay for temporary housing while major systems are repaired, effectively doubling their housing expenses for months.

Hidden Costs

Even with a thorough inspection, many problems won’t reveal themselves until demolition begins. Mold, asbestos, termite damage, and unpermitted work are leading causes of blown renovation budgets.

These hidden issues can’t always be identified in advance, and they almost always disrupt your budget and timeline.

Timeline and Budget Overruns

Delays are the rule, not the exception. Supply chain issues, contractor availability, permit hold-ups, and unexpected discoveries can easily extend a three-month project into six months or more.

If you’re working on a tight schedule or hoping to move in by a specific date, those delays can quickly upend your plans, leading to disappointment and additional costs.

Non-Value-Adding Work Required

The toughest pill for many first-time buyers to swallow? A large portion of renovation spending is going toward line items that don’t increase home value. Structural repairs, safety upgrades, and utility improvements are essential, but they rarely deliver a return on investment.

You’ll spend money just to make the home livable, with little visible reward.

Financing and Loan Options for First-Time Homebuyers

Financing a fixer-upper may involve a different process than buying a move-in-ready home. If the property is in severe disrepair, standard mortgages may be off the table.

Fortunately, several renovation loan programs are designed specifically to help buyers finance both the purchase price and the cost of repairs.

FHA 203(k) Loans

An FHA 203(k) loan is a government-backed mortgage offered through the Federal Housing Administration (FHA) that allows homebuyers to finance both the purchase of a home and the cost of necessary renovations in a single loan. It’s designed specifically for buyers looking to purchase fixer-upper properties that may not qualify for traditional financing due to their condition.

First-time buyers are particularly attracted to this loan product because it has a low down payment requirement (as little as 3.5%) and flexible credit score standards.

There are two variations of the FHA 203(k) loan:

• Limited 203(k): This loan is best suited for smaller projects, as it allows up to $35,000 in renovations with a minimum down payment of 3.5%. It has a simplified approval process but doesn’t cover structural work.
• Standard 203(k): This option is designed for larger renovations with no cap on repair costs (within FHA loan limits), but it requires more paperwork, including a HUD-approved consultant and detailed contractor bids, before approval.

While FHA 203(k) loans can help you finance a fixer-upper, they do have the following requirements:

• Property must be a primary residence
• Renovations must be completed within 6 months
• Borrowers must use licensed contractors (no DIY)
• Minimum credit score of 580 for 3.5% down (500–579 requires 10% down)

These loans are a good fit for first-time buyers or budget-conscious buyers looking to purchase a lower-priced home that needs work, but who need financing for both the purchase and renovations bundled into one mortgage.

Fannie Mae HomeStyle® Renovation Loan

The HomeStyle Renovation loan is a conventional mortgage backed by Fannie Mae that allows buyers to purchase a home and fund renovations with one loan. It offers more flexibility than government-backed options, allowing for luxury upgrades and custom designs, in addition to functional repairs.

Borrowers can purchase with a down payment as low as 3% if they are first-time buyers (5% for repeat buyers), but they must have a minimum credit score of 620.

One of the best features of Homestyle Renovation Loans is that they can be used for primary residences, second homes, or investment properties. However, renovations must be completed by licensed contractors and finished within 12 months.

HomeStyle loans cover everything from structural work to high-end finishes, giving buyers more creative freedom with their renovations. Funds can even be used for energy efficiency upgrades and landscaping. They are best for buyers with good credit who want maximum renovation flexibility, including higher-end design choices or mixed-use property options.

VA Renovation Loans

VA Renovation Loans combine the benefits of a VA home loan with the ability to finance renovations. These loans are available to eligible veterans, active-duty service members, and qualifying military spouses, making it possible to buy a fixer-upper with 0% down and up to $200,000 in renovation funding.

The caveat is that renovations must be completed by VA-approved contractors and completed within 120 days of loan closing. However, not all VA lenders offer renovation loans, and the loan’s requirements can be challenging to meet.

That said, VA Renovation Loans can be a financing option for fixer-uppers and are ideal for military buyers who qualify for a VA loan but need to make repairs or upgrades to make the home safe, functional, or tailored to their needs.

Freddie Mac CHOICE Renovation® Loans

Freddie Mac’s CHOICE Renovation loan is a conventional renovation loan similar to HomeStyle but with added features for “resilience upgrades”, which are improvements that protect against future natural disasters. It has a down payment requirement as low as 3% for first-time buyers (5% for repeat buyers) and a minimum credit score of 660.

The CHOICERenovation loan can fund repairs, upgrades, and disaster-proofing improvements (like flood barriers or hurricane strapping). It can also support repairs needed after a disaster and can be used for both structural and cosmetic work. However, it’s required that renovations are completed within 12 months.

Alternative Financing Options

Not every renovation qualifies for a specialized loan or requires it. If you’re tackling a smaller project or already own a home, other financing may offer more flexibility or be more accessible. But each option comes with trade-offs, so it’s important to understand when they make sense. Here are some alternative ways to finance the renovations on a fixer-upper:

• Home Equity Line of Credit (HELOC)
  A HELOC is similar to a home equity loan, but it gives you access to a revolving credit line based on the equity in a property you already own. It works much like a credit card: you borrow only what you need, and you pay interest only on what you use. This is a smart option if you’re a current homeowner with equity and need funds for ongoing or staggered renovation phases. Just remember: your home serves as collateral, and the funds still need to be repaid.
• Personal Loans
  For quick access to cash with minimal paperwork, a personal loan can be a helpful option, especially for small to mid-sized projects in the $5,000 to $50,000 range. These are unsecured loans, so you don’t need to put up your home as collateral, but that also means much higher interest rates and shorter repayment terms. Best used for clearly scoped projects, you can repay quickly.
• Cash-Out Refinance
  If you already own a home and have built up equity, a cash-out refinance allows you to replace your current mortgage with a new one for more than you owe and pocket the difference. The funds can be used for renovations; however, this typically resets your mortgage terms, involves closing costs, and requires a full underwriting process. It’s a long-term commitment best suited for homeowners with stable finances and significant equity to cover the costs of improvements.
• Credit Cards
  Using credit cards for renovations should be a last resort. While they’re convenient for small, time-sensitive purchases, the interest rates are among the highest of any financing option. Unless you’re confident in your ability to pay off the balance quickly, it’s best to avoid using credit cards for renovation work.

How to Buy a Fixer-Upper as a First-Time Homebuyer

Buying a fixer-upper as your first home means taking on a project that requires planning, patience, and support. Renovations come with moving parts, tight budgets, and unexpected discoveries. Success starts with knowing what to expect and being ready to act.

Step 1: Partner with the Right Real Estate Agent

Work with an agent who understands renovation costs and timelines, financing, local permit rules, and what to look for in older homes. You’ll need guidance through negotiations, inspections, and contractor coordination.

FastExpert can help connect you with an agent who knows fixer-uppers inside and out, making it easy to find a professional with experience helping first-time buyers navigate loan programs and renovation timelines.

Step 2: Get Pre-Approved for Renovation Financing

Don’t start house hunting until you know exactly how much you can borrow and spend on repairs by getting pre-approved. Select a lender that specializes in the loan products you believe are the best fit for your purchase.

Make sure they understand the approval process and ask how long it takes them to underwrite and close a loan.

Step 3: Set a Realistic Budget with a Built-in Buffer

Total your budget with three parts: purchase price, estimated renovation costs, and at least 20% in contingency. Every project includes unknowns. Demolition reveals surprises, permits cause delays, and costs shift fast.

You may also need to budget for storage, temporary housing, tool rentals, and cleanup fees. Always plan to spend more money than your initial estimated cost.

Step 4: Shop Smart and Get Professional Inspections

Target homes with strong structures and updated systems. Avoid properties with foundation cracks, extensive water damage, or outdated electrical panels, as these repair costs can be difficult to estimate. Once you’ve found a home, go beyond the standard home inspection.

Bring in specialists: structural engineers, sewer scope technicians, pest inspectors, and environmental testers. These inspections may be an upfront cost, but they catch major issues early and help shape your renovation plan.

Step 5: Collect Contractor Quotes Before You Close

Don’t rely on rough estimates. Get at least three written quotes for each major project before finalizing your financing. Quotes should include material costs, labor, permits, and cleanup. These numbers help you determine the loan amount and set a realistic construction timeline.

Start by asking your real estate agent for local referrals. Agents who work with renovation buyers often know reliable and responsive contractors. Always verify licensing, insurance, and references. Take the time to compare prices, scope, materials, and timelines. Remember, the cheapest bid isn’t always the best fit.

Step 6: Plan Project Phases and Set Priorities

Structure your renovation in clear phases:

• Phase 1: Focuse on safety and functionality, including roofing, plumbing, electrical, and HVAC.
• Phase 2: Address core improvements: walls, insulation, windows, and flooring.
• Phase 3: Finish paint, fixtures, tile, and design upgrades.

Prioritize the work based on what makes the home safe, functional, and livable, then move toward upgrades that improve comfort and design. While it can get exciting to pick out countertops and hardware, working in order keeps the project efficient and prevents unnecessary rework.

Step 7: Understand Local Permit Requirements

Every city has its own building codes, timelines, and fees. You need to know the rules before your project begins, not halfway through demolition. Start by researching local building codes and permit requirements early in the process.

Permit costs can range from $200 to over $2,000, depending on your location and the size of the project. Approval timelines vary too; expect anywhere from 2 to 8 weeks, especially if your plans require plan reviews or inspections. It can be helpful to visit your city or county’s building department website or call directly to confirm what types of work require permits.

While your contractor should take the lead on permitting, it’s best to research requirements yourself to make sure nothing gets missed. Furthermore, make sure every contractor you hire agrees to pull the appropriate permits. This should be written into your contract. You do not want to be the one held responsible for unpermitted work when you go to sell, or worse, be forced to redo it.

Step 8: Prepare for Project Management

Buying a fixer-upper means managing a project from the ground up. You’ll be coordinating with contractors, scheduling deliveries, tracking budgets, and ensuring everything moves forward smoothly. Even with professionals on your team, the responsibility falls on you to keep things organized and on schedule.

Plan for delays and expect surprises. Build breathing room into your timeline and budget from the start, as a permit might take longer than expected, or a material order could arrive short. These things happen—and they happen often.

Keep detailed records of every quote, invoice, and receipt. Track payments and delivery dates. Use tools that work for you, whether it’s a spreadsheet, a project management app, or a simple checklist. Organization helps you stay in control when things shift.

Make time to be on site regularly. Contractors will have questions, and decisions will need to be made quickly. If you’re not present, you might miss a detail or decision that results in an outcome that doesn’t meet your expectations. Running a renovation takes effort, but staying engaged ensures a better outcome and a home that truly reflects your vision.

Are You Really Ready to Buy a Fixer-Upper?

Fixer-uppers have potential, but they may not be the right fit for everyone. The lower price tag and customization possibilities are appealing, but these projects demand more time, money, and energy than many first-time buyers expect. The following criteria will help potential fixer-upper buyers evaluate if this is the right option for them.

Financial Readiness

Cost should be the first deciding factor. Do you have the funds to buy and renovate? Before you even start shopping, your finances should be in order. A healthy emergency fund, ideally covering at least six months of living expenses, is your safety net. Lenders also want to see a steady income history, typically over the past two years, and a debt-to-income ratio that leaves breathing room for both your mortgage and renovation loan payments.

Renovation costs rarely stay fixed. Materials fluctuate, timelines shift, and unexpected repairs can surface mid-project. You’ll need extra cash on hand for things that loans don’t always cover—permit fees, inspections, temporary housing, and any immediate fixes required to make the home livable.

Being financially ready doesn’t mean having unlimited funds; it means being prepared to make informed decisions. It means having the resources and flexibility to take on a project without putting your entire financial life at risk.

Lifestyle Assessment

Living through a renovation is a lifestyle adjustment. Construction noise, dust, and disruption become part of your routine. Some projects stretch on for months or longer. A successful fixer-upper project requires time, focus, and constant decision-making. You’ll need availability during the day to coordinate with contractors, review deliveries, and handle surprise issues. If your job or family commitments don’t leave much room for extra responsibilities, managing a renovation can quickly feel overwhelming.

Stress is part of the process. Delays happen, costs shift, and plans evolve. You need to be someone who can stay calm under pressure and adapt when the timeline changes. A reliable support system helps. If you’re buying with a partner, align on expectations before you begin. Renovations test communication and patience.

Flexibility matters, and your social plans may take a back seat. Living in a construction zone requires compromise, stamina, and a willingness to adjust your lifestyle for the sake of long-term gain.

Skills and Experience

Every renovation requires decisions, and those decisions are easier if you’re experienced in homeownership and renovations. First-time buyers need to understand the limits of their own experience and know when to bring in a professional.

Contractors will come to you with questions. Sometimes they’ll need answers immediately. Being decisive, well-researched, and clear in your expectations will keep the project moving forward and reduce confusion on-site.

If you’re planning to handle some work yourself, assess your DIY skills honestly. Painting and small repairs are often manageable. Plumbing, electrical, and structural tasks usually aren’t, and mistakes in these areas can lead to costly delays or dangerous results.

Having a basic understanding of how homes are built helps you make smarter decisions. Renovations require organization, coordination, and the ability to stay focused across multiple phases at once. If you’ve managed projects before, whether through work or past home improvements, you’ll have a head start.

When Fixer-Uppers Make Sense

Fixer-uppers can help you achieve your dream home, but they may not be the right strategy for every buyer. If you’re going to buy a fixer-upper, you need to be built for renovation life, meaning you:

• You have financial flexibility.
  Buyers with strong cash reserves beyond the down payment are better equipped to handle the unexpected. Renovations come with upfront costs, and having the funds to cover delays, surprise repairs, and temporary housing makes the entire process more manageable.
• Your lifestyle can handle disruption.
  Construction stretches your patience. If you can live in a home mid-renovation, or manage from work while renting, you’ll have a smoother experience. Time availability, project management skills, and stress tolerance all play a role.
• You want to move to a better neighborhood.
  Many buyers use fixer-uppers to access school districts, locations, or property sizes they couldn’t afford otherwise. It’s a powerful strategy in competitive markets where move-in-ready homes go for a premium.
• You’re staying long-term.
  Most renovation investments take years to pay off. A five-year plan gives you time to complete improvements, build equity, and enjoy the home without rushing to resell.
• You’re hands-on and realistic.
  Renovation is a mindset. If you have the skills, or the willingness to learn, and you understand the real costs and effort involved, the process can be deeply rewarding—not just financially, but personally.

When to Choose Move-In Ready Instead

Not every buyer is ready for the challenges of a renovation. If your current situation requires stability, simplicity, or speed, a move-in-ready home is likely the better choice. A move-in-ready home might be a better option if:

• Your budget is tight.
  Fixer-uppers require money beyond the mortgage. If your savings only cover the down payment and closing costs, you’ll struggle to fund repairs or cover unexpected issues. A move-in-ready home reduces financial risk and keeps costs more predictable.
• You need stability right away.
  Whether it’s a job relocation, family demands, school start date, or health-related need, some buyers simply can’t afford to wait through months of renovations. A completed home means you can unpack and settle in from day one.
• You’re not planning to stay long.
  If you expect to move within five years, there may not be enough time to see a return on your renovation investment. The shorter your timeline, the more valuable a turnkey home becomes.
• You have low stress tolerance.
  Be realistic with yourself. Renovation adds stress, decisions, and time demands. If you’re not skilled at handling stress while balancing other demands, a move-in-ready home offers a simpler path with fewer moving parts.
• You’re not experienced in project management.
  Renovations require coordination, even if you hire a general contractor or site manager. There will be endless decisions to be made and problems to be solved. If you don’t have time or the desire to oversee contractors, review quotes, and keep projects moving, you’ll be better served by a home that’s already finished.

If you’re top priority is moving into a home and getting settled, a move-in-ready property, even if it’s a little dated, will leave you happier than taking on a project.

Should You Buy a Fixer-Upper as a First Home?

Fixer-uppers promise potential, but demand preparation, time, and some skill. For first-time buyers, whether this is the right undertaking depends on your aspirations, financial ability, and whether you have the skills to take on the project.

If the thought of coordinating contractors, juggling timelines, and living with ongoing construction feels exciting, it might be time to start hunting for the right house. If stability, speed, or simplicity are bigger priorities, a move-in-ready home may serve you better.

Whichever path you choose, the right agent makes all the difference. FastExpert connects first-time buyers with local real estate professionals who understand renovation financing, property condition red flags, and neighborhood value potential. With expert guidance, you can make a confident choice—one that matches your goals, your budget, and your timeline.