Buying a Fixer Upper: Yea or Nay?
By: Jacob Hurwith
The single biggest advantage of buying a fixer-upper is the price. Fixer-uppers give eager buyers the chance to own their property when they can’t afford those move-in ready homes they desire. Homes that need work are almost always priced accordingly, as the owner knows the home needs work before it can be sold, therefore, the sale price is usually below the potential market value. As such, buying a fixer-upper makes perfect sense for those planning to move in a few years.
Property taxes are based on the home’s sale price. Therefore, your annual property taxes will be less if you buy a fixer-upper as compared to a new home. In addition, according to Canadian Financial Resources, Inc., some fixer uppers also permit the owners to claim an investment tax credit for qualified rehabilitation costs. This typically applies to historic homes that are listed on the Register of Historic Places.There are also ways to save money when it comes to obtaining a loan for purchasing a fixer-upper. For more info, please see Renovation Financing.
The other key advantage of buying a fixer-upper is a blank canvas. If you go into a deal knowing you’re going to spend money to fix it up, you have the freedom to design the house however you wish. If want an open concept, you can do it. If you want to go bold in the kitchen, you can do that too.Fixer-uppers let you tailor your house to your exact taste. While it is more work, this power can not be underrated.
Fixer-uppers require more work than move-in ready homes. Not only will you have to research contractors and work with them during the remodelling process, but to save some money, you might have to get your own hands dirty. Removing an old toilet, painting a bedroom or demolishing that really ugly living room may sound like a chore, but many find it invigorating. Either way, prepare to get your hands dirty.
Move-in ready homes cost more because they are just that. As soon as you unpack your hundreds of boxes, your home is ready. The same cannot be said for a fixer-upper. The remodelling process can take months until the home is move-in ready. This is especially troublesome for those working with an expiring lease and the excitement of moving into a new place will have to take a back seat if you purchase a house that needs to be fixed.
In any fixer-upper, there will always be surprises. You can’t know what’s behind the walls or around the pipes until you open them up and get to work. Similar surprises can occur with move-in ready homes, but as you can imagine, they are typically more updated.
Remodelling Costs Could Outweigh Savings
It is critical to do your research before you go ahead and purchase a fixer-upper. There are rare occasions where the modelling costs could outweigh your initial savings. So, whether you have to redo the bathroom or renovate the entire house, make sure you have accurate and reliable information regarding costs and how long the project will take.
Move -In Ready Pros
Move-in ready homes require little, to no work at all. As soon as you move in, all the work is done. There is (hopefully) no painting, no demolishing, no removing toilets and no maintenance. Move-in ready homes let you enjoy the comforts of your new home as soon as you purchase the property.
New Design Elements & Technology
There are certain design elements that seem to come with new homes as opposed to fixer-uppers. New homes come with design elements today’s lifestyle demand. Those elements include: open floor plans, walk-in closets, higher ceilings and hardwood flooring to name a few.
New homes are also equipped with the latest technology built right in like alarm systems, speakers, Internet wiring and cable, saving you lots of time and money.
Also newer homes tend to be more energy efficient. Not only will an energy efficient home keep you warmer in the winter and cooler in the summer, but it will also save you thousands of dollars in utility bills over the home’s lifespan.
Move-In Ready Cons
Move-in ready homes are almost always more expensive than fixer-uppers. If they weren’t, no one would ever buy a fixer-upper. If you want to buy a move-in ready home, expect to pay more than you would for a fixer-upper.
As a dream home, you want it to be perfect. You may love the master bath and the hardwood flooring, but your husband may have a few issues with the brand new kitchen. Either way, there will always be some give and take when it comes to buying new homes. If you’re not into the whole DIY scene, the chosen designs will have to stay as is.Unless you want to pay to remodel or get your hands dirty, move-in ready homes give you little freedom to customize the home as you wish.
Newer homes rarely offer the unique architectural details older homes present. While this may not be an issue for some, others love those distinct details outside the home. Keep in mind, few homeowners, if any, change the look and feel of the home’s exterior (excluding landscaping, pools, etc.)
If you are still uncertain about your options or require additional information about the advantages and risks of choosing an older home, contact one of our friendly staff and we would be delighted to provide detailed information.York National Realty Inc. could help you select local builders and contractors that can give you precise and reliable information prior to finalizing the purchase of an older home.