Buying your first home can be overwhelming. From choosing your Realtor to navigating house styles, the options—and the decisions, for that matter—are seemingly endless.
One thing to consider is whether you want to go for a fixer-upper or an already-refurbished home. Each option features a unique set of benefits.
That said, here are three reasons to opt for the fixer-upper. By making an offer on a property that needs some TLC, you can:
Choose a higher-end neighborhood for a lower price
Is the location of your home more important to you than the home itself? While structural and safety concerns should never be overlooked, a property with cosmetic setbacks can give you access to a nicer neighborhood for a reasonable cost.
In addition, if you’re on a tight budget, you can buy a fixer-upper and live on a bigger lot or a quieter street without breaking the bank. You wouldn’t necessarily have this flexibility with an updated home, as the property would likely be more expensive to begin with.
So, don’t let the chipped paint or the outdated kitchen bring you down. Instead, choose a home in your favorite location—say, near a park you love or in a school district you’re eager to break into—and get ready to put in some elbow grease.
Spend less upfront
Fixer-uppers are, by nature, less expensive than their new or renovated counterparts—at least in the beginning. Your down payment will be lower, and your mortgage will be less daunting in most cases. You’ll also have several options in the way of financing your renovations.
As such, you’ll have more money in the bank after you cover your upfront costs. And, when you’re ready to improve your property, you won’t necessarily need to pay up right away. That’s because your home might qualify for a special government-backed loan designed specifically for renovations.
For more information on the Federal Housing Administration’s 203(k) Improvement loan, visit the HUD website. It could be a great fit if you decide to purchase a fixer-upper.
Build useful construction skills
Some homebuyers hire a contractor to complete their renovations, while others prefer a DIY approach. No matter the route you take to improve your home, you can leverage the renovation process and build important manual skills.
If you’ve never swapped out a light fixture before, a fixer-upper will give you a chance to learn. (Be sure to go through the right safety channels and switch off your electricity beforehand.) Or, if you hire a professional to install new flooring in your living area, you can observe them and tackle flooring yourself in a different room.
On that note, another appealing factor is that you can tailor a fixer-upper to your exact preferences.
And finally, an added bonus of choosing a home that needs some work: resale value! Of course, you’ll spend a few more Saturdays completing DIY projects, making backsplash selections, and vetting contractors than your move-in ready neighbors, but it won’t be for nothing. After you make the necessary improvements on your home, you will be able to sit back and watch your property value skyrocket.
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