Fixer-Uppers: What to Know Before You Buy
Buying a fixer-upper can be a great investment—if you know what you’re getting into. From pricing to renovations, here’s how to evaluate whether a fixer-upper is the right move for you.
1. Evaluate the Price
A fixer-upper should come at a fixer-upper price—seems obvious, right? But it’s easy to fall in love with a home that’s marketed as needing “just a little TLC.” Before you get attached, do your homework.
Compare the home’s price to similar properties in the neighborhood, considering their features and upgrades. A REALTOR® can help with this analysis and ensure you don’t over-improve for the area—a costly mistake if you plan to sell in the future.
2. Assess the Necessary Improvements
The best fixer-uppers offer opportunities for instant equity—meaning the value added outweighs the cost of the improvement. Some projects, like painting or landscaping, can be tackled with sweat equity for a big impact. Landscaping, in particular, is a high-value, low-cost upgrade since it boosts curb appeal.
Other projects, however, require professionals and a significant budget. Be sure to weigh the cost of these improvements against the purchase price before moving forward.
3. Which Professional Projects Add the Most Value?
While most home improvements add some equity, a few stand out as the best return on investment. According to the National Association of REALTORS®’ Remodeling Impact Report, these three upgrades are among the best:
- New Roof—An average roof replacement costs around $10,000. However, you can usually recoup a fair amount of its cost at resale.
- Hardwood Floors – Refinishing hardwood floors costs about $3,000 and can recoup 100% of that investment. Installing new hardwood floors costs approximately $5,500, with an expected return of $5,000.
- Insulation – Adding insulation costs roughly $2,100 and can recover $1,600 at resale—not to mention the 10% to 50% energy savings.
While these are safe bets, any renovation can be worthwhile if the home is priced accordingly. For example, a full kitchen remodel may cost $65,000 but only add $40,000 in value. If the fixer-upper is discounted enough, you could end up with your dream kitchen for a fraction of the cost.
4. Know Your Tolerance for Disruption
Fixer-uppers require time, patience, and the ability to handle inevitable delays. Even a simple bathroom remodel can take two to three weeks. Add in flooring, a kitchen renovation, and new siding, and you’re looking at a months-long project.
Before committing, assess whether you have the time, budget, and emotional endurance to handle the renovation process. If you’re up for the challenge, a fixer-upper can be incredibly rewarding—both financially and personally.
Final Thoughts
Buying a fixer-upper can be a fantastic opportunity if you approach it with the right strategy. By evaluating the price, understanding the scope of renovations, and knowing your limits, you can turn a diamond in the rough into a profitable investment—and a home you love.
