Would You Rather Buy a Fixer Upper or Move In Ready Primary Residence?
If you needed to purchase a primary residence would you buy one that’s a fixer upper or one that’s move in ready?
It’s a question that I think circulates regularly and it’s a good one. The answer really depends on who you are and what place you are in your life. For instance: are you a handyman? Do you want to do some of this work yourself? Do you want to outsource this work? OR would you rather buy a perfectly complete property and not have to deal with any of the work?
So think about that. Think if you really want to be living in a property for the next several weeks or months that needs to be improved and you’re working on over and over. A lot of that may depend on your current situation - are you single or a new couple who might find it entertaining to spend nights and weekends working on the house? Maybe you’re a family with kids and don’t want contractors waking your family up early or don’t see yourself working late at night rather than spending time together and maybe you would rather just have a move in ready house! These are all things to think about.
On my end, I think about the value basis of it. And that will depend on what area you’re in. If you’re buying a property in an area where a fully renovated house costs 200k, a fixer upper might cost you around 160k and that needs a lot of work. So what’s the point?
Why would I buy something for 160k if it needs 20-30k of work? Having the built in equity is great but in order to get that, it’s going to take time to improve it and cash out of your pocket. Why do that when you can buy a move in ready home for about the same price, finance it, and not have to deal with improving it? You might not have that equity of a few thousand dollars but you’ll have your time!
I always look at it this way - if I’m purchasing a primary residence, I want to make sure I get it at a discount, it’s a good bang for my buck, and it’s going to work for me and my family.
There’s no right or wrong answer, but when you are buying a primary residence it’s important to think about all these things before making a decision. A lot of people are attracted to the thought of buying a fixer upper and having some built in equity. If that’s the case and you can get it at a big enough discount that you can turn it into an investment, great! But when you’re comparing apples to apples in this particular case and you don’t truly think it will produce a big enough ROI then just buy something that you can love, live in, and is move in ready.