Is a “Fixer Upper” Home Such a Good Idea?

Thanks to popular home restoration shows on TV, many people have a good idea of what buying a “fixer upper” home entails. However, in some of the shows, people get their languishing houses repaired and upgraded for free. They leave the property, and then return days later for the surprise revelation of the nice, new designs the residence offers.

It would be great if this is how it went for all renovations. But the reality is: When it comes to restoring a declining property, most homeowners are left to their own financial devices. With this in mind, let’s take a look at some of the most important pros and cons of buying a fixer upper, financially and otherwise.

Pro: Beautiful Design

One of the main reasons people purchase fixer upper properties is because the homes have historic design themes seldom found in new homes (Rococo and Art Nouveau, for example). Instead of seeing the rehab effort as a burden, many buyers of beautifully designed fixer uppers are only happy to start the repair work. It’s like skillfully restoring a classic car: You know your efforts will be rewarded with a fine, finished product — and that makes the journey a big part of the fun.    

Con: Maintenance Issues

This drawback is especially applicable to homes that were built near turn of the 20th Century or earlier. Residences that have been around for at least 100 years and haven’t been well-maintained often have the following maintenance concerns that new residences don’t; including:

  • Old radiator heating system
  • Non-energy efficient doors and windows
  • Metal plumbing pipes with internal corrosion
  • Old, expensive type of roof system (e.g., slate roof)
  • No central air conditioning

These maintenance issues and others are why it’s important to have a fixer upper examined inside and out, preferably by a professional inspector who understands residential construction practices that were used during the time period when the home was built.    

Pro: Loan to Cover Repairs

The home maintenance issues above can cost quite a bit to remedy, but at least some of the expense can be covered by the home mortgage loan you receive. Because major improvements, such as central air conditioning and new doors and windows, often increase a home’s real estate value, applying for a home mortgage that allows you to purchase the residence, and fix it up quickly, can be a sensible option.     

Con: Residential Crime

Over time, grand neighborhoods can turn into residential badlands, where crime is too much of a concern to have peace of mind as a homeowner. Amid the danger often stand old, handsome homes that have fallen on economic hard times, and need to be renovated from top to bottom after decades of neglect.

Because the homes are generally quite affordable, they naturally attract homebuyers who can’t afford homes of the same size and build located in better neighborhoods, in better condition. Buyers who go for fixer uppers in questionable neighborhoods sometimes bank on the areas “coming back” and rewarding them for a fortuitous investment, but it’s often impossible to tell if and when a resurgence would happen.

Pro: Customizable Space

There’s at least one aspect of buying a fixer upper home that attracts almost everyone: In terms of interior design, you can pretty much turn the house into whatever you want.

Keep the traditional floor plan, or remove non-load bearing walls to create an open floor. Go with regal, elegant kitchen cabinetry and counters, or make the kitchen appear sleek and modern.

Use an attached solarium as a small greenhouse or as a sun room. Home shoppers naturally want to find the “perfect house” for their wants and needs. Remodeling a fixer upper lets you create the perfect house.         

Ready to Fix Up a Fixer Upper?

There are plenty of things to consider before you buy a fixer upper home, but determining on your own whether you’re choosing the right home loan doesn’t have to be one of them. That’s because American Eagle Credit Union will evaluate your home buying qualifications and requirements, and present the best lending options for your particular situation.

If you’re interested in a fixer-upper, contact us today at (800) 325-9905, or use our contact form.  We look forward to hearing about your homeownership plans and helping you make them a reality.

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