Should I Buy a Fixer-Upper or Move-in Ready Home?


|10 min read

As you start to search for houses in your desired area, you will quickly see how different their conditions are. Some houses have brand-new carpet and fresh paint, making them move-in ready for anyone who is interested in the property. Other houses need a little more work.

A fixer-upper might need cosmetic improvements and upgrades, or it could have serious structural concerns. While you can save money buying a fixer-upper, you might spend even more money fixing it up than you would a move-in ready house. Which one do you choose?   

There are pros and cons to each option, and the decision will depend on your specific financial and life situations. Learn more about your options to choose wisely between the houses available to you.

Pros of Buying a Fixer-Upper

While a fixer-upper is certainly a lot of work – even if you hire contractors to take on most of the workload, buying one of these houses could pay off in the long run. Here are a few benefits to consider. 

Lower Initial Purchase Price

Simply put, fixer-upper homes cost less. Their value is lower because of the extensive repairs and upgrades that future homeowners will have to complete to make the house livable. 

The extent of the repairs will determine how discounted the property is. For example, a house might have a good foundation, roof, electrical, and plumbing, but could reek of cigarette smoke inside. While the buyers will need to repaint the walls and redo the flooring, they will have less work than if they needed to redo the foundation or rewire the house. 

The key to finding a good fixer-upper is to fully understand the extent of the damage – and the cost to address it. 

Potential for Increased Home Equity

As you address the necessary repairs in the home, you can increase the property’s value and grow your home equity. For example, the median cost of a house as of July 2023 is $406,700. If you can buy a fixer-upper house for much lower than the market value and make repairs, you could bring its value up to local standards.

When the time comes to sell the house, it could be worth much more than you paid for it – depending on the market. This is particularly useful if you ever need to take out a home equity loan or home equity line of credit (HELOC). You can get an appraisal on the value of your renovated home and use its value to secure a loan for your needs. 

Opportunity for Customization

There are other reasons to buy a fixer-upper beyond the financial benefits. It gives you the ability to completely customize the home to accommodate your needs.

You can add new appliances from a brand you trust or install a kitchen island to create a sense of flow.

You can remodel bathrooms, design an optimized home office, and create a finished basement.

Essentially, you can take a shell of a house in a good area and remodel it into your dream home.  

While this is also possible in a move-in-ready property, you might not have the budget to start renovations immediately because of the current market price.

Make Repairs Now Rather Than Later

One of the challenges of homeownership is that something can always go wrong. Your refrigerator could break or your roof might need replacing.

By completing your renovation project as soon as you move into the home, you can decrease the chances that you will need to do repairs in the future.

Most appliances last more than a decade along with other home repairs. You can enjoy peace of mind in your house for several years. 

Cons of a Fixer-Upper

It’s easy to get caught up in the romance of designing your dream home and saving money on a fixer-upper. However, these houses come with several risks and potential drawbacks. Here are a few things to look out for. 

Unforeseen Repair Costs

One of the most important things to do when buying a fixer-upper is to get a complete inspection of the property – and maybe also get a second opinion. One of the biggest risks is that you discover additional issues with the home that blow out your renovation budget.

For example, you could discover termite damage or black mold that needs to be treated immediately. You might realize that a cosmetic bathroom remodel actually requires intense plumbing repairs.

These costs are emotionally stressful and can hurt your bank account.

Time-Consuming Renovations

Another thing to consider is how long your renovations might take. Between permit approval, contractor schedules, and the availability of materials, each project could take several months.

During this time, you will either have to live in the home or find temporary housing away from it.

Some people spend more than a year repairing their fixer-uppers and have to pay costly rental rates before the house is livable.

Financing and Insurance Hurdles

You also might have a harder time securing funding for your fixer-upper. You will need to cover the cost of the property itself while budgeting for the repairs. Fortunately, there are multiple options to consider to get the funding you need. 

Securing insurance can also be a for a fixer-upper. The roof, electrical wiring, plumbing, and even the materials themselves can create hazards that increase your home insurance costs. 

“Many older homes contain outdated electrical wiring and antiquated plumbing, which can create all types of hazards,” says Mark Friedlander at the Insurance Information Institute. “And typically, the replacement costs for an older home run much higher than the market value of the property.”

Fortunately, after you make the repairs, you might be able to secure lower insurance rates because you proved that the home is safe.

Pros of a Move-In Ready House

Buying a move-in ready home is much simpler than investing in a fixer-upper. These properties allow you to immediately settle in and enjoy your new property. Here are a few reasons why so many buyers want turnkey properties.

Convenience and Immediate Comfort

With fixer-uppers, almost every aspect of the house can either become a headache or an expense. You can turn on the washing machine and discover a major plumbing issue. This isn’t the case with a move-in ready home.

While every house has its issues and you will need to make repairs on various aspects eventually, most parts of the house should function at their best. 

This is an ideal option for homeowners with kids and people who are relocating for jobs. You can quickly move in your belongings and start your life in the new home.

Predictable Costs

Another benefit of a move-in ready home is that you don’t have to worry about unexpected costs breaking the bank. You can enjoy a standard mortgage payment, stable utility bills, and predictable expenses related to taxes and insurance. With a fixer-upper, an unexpected issue could arise that leads to a significant bill. 

Experts still recommend setting aside one to two percent of the home’s value for repairs each year, even if it is move-in ready. If your home is worth $400,000, then you will set aside around $600 monthly just in case you need to make a repair.

Modern Amenities and Energy Efficiency

Many move-in ready homes come with amenities that make living there more enjoyable. You might be able to use Wi-Fi-connected light switches, smart appliances, and energy-efficient water heaters and pipes. In fact, eight percent of homeowners say they have solar panels installed in their homes, which can reduce or eliminate their electric bills. Opting for a turnkey house could allow you to enjoy all of the comforts you crave. 

Cons of a Move-In Ready Home

While moving into a fixer-upper is easy, buying one can provide some challenges – especially in a hot seller’s market. Here are a few problems that come with buying a move-in ready home.

Higher Purchase Price

Homeowners invest in their properties to raise their market value. If the current seller replaced their garage door, recently remodeled the kitchen, or updated the bathrooms, they will expect the house to sell at a higher price to recoup their investments.

Before you start looking at move-in ready homes, set a clear budget for what you can afford. Make sure you can cover the mortgage, interest, insurance, taxes, and homeowner’s association (HOA) fees if applicable. This will allow you to look at realistic homes for your needs. 

Less Room for Negotiation

Similarly, sellers who list move-in-ready properties know the value of their homes. They won’t be willing to accept lowball offers and might not want to negotiate with you. Your negotiation might be moot if other buyers are willing to pay full price. 

Oftentimes, the owners of fixer-uppers want to sell the properties quickly – especially if they are facing foreclosure. You might be able to negotiate a good deal on the home, even if it has only been on the market for a short time.

Potential for Generic Finishes

Just because a home is move-in ready doesn’t mean it matches your design style. For example, many people have passionate feelings about gray flooring, which has been a popular trend for the past few years. It’s possible that you buy a house with brand-new gray floors that you want to rip out immediately. 

As you look at move-in ready homes, track how much you would want to remodel or renovate once you move in. You might decide that some houses come with more effort than they are worth. 

How to Find a Fixer-Upper

There are multiple ways to find fixer-uppers in your area that meet your housing goals. Keep in mind that it might take longer to find one of these projects than a move-in-ready house.

This is particularly true if you have a strict repair budget or an ideal neighborhood where you want to live. Here are your options.

  • Network with investors and Realtors: get to know people who specialize in buying project houses. They might be able to help you find one that meets your needs. 
  • Attend foreclosure auctions: while this is a great way to get a cheap house, you often have to buy it sight unseen. This means you won’t be able to appraise and inspect it before your purchase. 
  • Visit specialized websites for fixer-uppers: while sites like Zillow and Realtor can list these properties, you might find niche websites that focus exclusively on homes that need major repairs. 
  • Check out FSBO listings: you can see which homes are listed as For Sale By Owner that need significant repairs.
  • Hire a Realtor who specializes in fixer-upper homes: many agents work with investors and home flippers who want less desirable properties. You can find a Realtor who knows how to find the types of homes you are looking for. 

Regardless of whether you buy your home through a seller’s agent or FSBO, make sure you have a real estate agent to represent you. They can make sure you get a good deal on the home while potentially helping you save on the total costs of closing.

Key Considerations When Evaluating a Fixer-Upper

As you look at different fixer-uppers in your desired area, develop a set of criteria to set the top options apart from the rest. Here are a few considerations to look out for in a fixer-upper that can help you set a budget for your remodeling project. 

  • Property location: this might be one of the most important aspects of your house selection. You can change everything about the house you buy except for its location. 
  • Historic designation: historic homes are charming and unique, but they might be a lot of trouble to restore. If a property is preserved by the local historical society, you might need to use specific materials for the repairs and could have limits on the amount of remodeling you can do.  
  • Structural soundness: this is another major factor in your decision process. Repairing foundations and securing the structure is essential but also expensive. You also might not be allowed to live in the home until it is deemed structurally sound. 
  • Roofing: a leaking roof can destroy a home. It can damage the electrical wiring and warp the flooring. Get a roof inspection before you buy a fixer-upper.  
  • Other major factors: look at the various systems of the house to understand their current state. These include the electrical wiring, plumbing, heating, and air conditioning.
  • Toxic elements: check for signs of mold, smoke damage, termites, and other concerns that could affect the safety of the home.   

Additionally, ask about the sewer or septic system in the house. Even if a fixer-upper is in reasonably good condition, you could end up in a stinky situation once you move in. 

Any cosmetic repairs on a fixer-upper can wait until these major issues are addressed. Your goal isn’t to find a perfect house but rather to be aware of all major factors in the home so you prevent hidden issues from ruining your renovation budget.

Financing Options for Fixer-Uppers

One of the biggest challenges of buying a fixer-upper over a move-in ready home is that you need to finance two different parts of the home purchase: the property itself and the renovation costs. While buyers of move-in-ready homes only need to secure a mortgage, you might need additional financing for your fixer-upper home improvement projects. Here are a few options to consider. 

  • Personal savings: consider submitting a lower down payment on the property so you can keep more of your cash in the bank. You can then use this money to cover the costs of major repairs. 
  • Home equity lines of credit: you can buy the house and then use a HELOC to secure a loan on the value of the property. This could be a good option if you are able to pay for the house with cash but need funds for the renovations.
  • Rehabilitation loan: also known as a 203(k) mortgage, this allows you to finance up to finance up to $35,000 to repair and improve the home. This could be a good option to make a fixer-upper livable before you move on to other projects. 
  • Personal loan: after you secure your mortgage, you could get a personal loan to cover the costs of any repairs. However, you need to make sure you can handle both a mortgage and monthly loan payment once you take it on.  

You don’t necessarily need a lot of money to invest in a fixer-upper. However, you need to be strategic about how you fund this project just in case your costs end up much higher than you thought they would be.

Find a Fixer-Upper or Move-in Ready Property

Both fixer-uppers and move-in-ready houses have their merits. If you have the patience and budget for a fixer-upper, you can increase your equity quickly while designing a dream home that you love. However, if you prefer immediate occupancy in your home, a move-in-ready model might be best for you. 

Once you decide which option is best for your needs, contact a local real estate agent and start the house-hunting process. They can help you find unique properties, navigate the homebuying process, and make your offers stand out in a competitive market. To find an agent turn to FastExpert. You can compare Realtors in your area and get to know these professionals before you hire one. 

Whether you are ready to embrace the renovation process or want to avoid substantial repairs, the real estate agents at FastExpert can help you find your ideal home.

Amanda Dodge

Amanda Dodge is a real estate writer and expert. She has worked in the field for more than eight years. She spends her time writing and researching trends in real estate, finance, and business. She graduated with a bachelor's degree in Communications from Florida State University.

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