If you’ve been thinking about buying a fixer-upper because you want to “save money,” be careful.
A new survey from Porch reveals that fixer-upper homes can be just as expensive as turnkeys, once you add in the costs of renovation:
Even though the majority of fixer-upper homeowners thought they could save money, they actually spent about the same or more than their move-in ready counterparts. Fixer-upper homeowners who went over budget spent over $US25,000 ($36,118) more than move-in ready homebuyers.
In other words, you could get yourself a move-in ready home for about the same price, once all is said and done — and you won’t have to spend the time and energy fixing the place up. The trick is to stick strictly to your budget.
The survey also notes that plumbing upgrades were the renovations most likely to go over budget. Indeed, bathrooms and kitchens cost fixer-upper homeowners more than they were expecting, with only 57 per cent of the fixer-uppers staying within their planned budget.
If you do plan to buy a fixer-upper home — or if that’s the only home available in your neighbourhood or price range — make sure you get the home inspected before you make any offers, so you know what kind of repairs and renovations to anticipate (and how much they might cost). Realistically, a home inspector should be part of your house-hunting toolkit regardless of whether you’re looking for a fixer-upper or a turnkey home, and we’ve previously advised readers to find your home inspector before you find your realtor.
You can also use tools like Architecture Australia renovation calculator or the AdBuild Cost Guide as a way of estimating the potential cost of renovating and upgrading your new home — and no matter what kind of home you end up purchasing, it’s a good idea to save at least 4% of your income for future home repairs.