There’s no denying that affordability is challenging right now. Rising home prices and everyday expenses have made it harder for many people to buy the home they want. But that doesn’t mean your dream of owning a home has to wait.
If you’re open to rolling up your sleeves — or hiring professionals who can — a fixer-upper might be your best opportunity to enter the market and start building equity sooner. Here’s what to know before you decide if this path is right for you.
What Exactly Is a Fixer-Upper?
A fixer-upper is a livable home that needs repairs or updates. Some might only require light cosmetic work, like removing wallpaper, replacing flooring, or repainting. Others could involve larger projects, such as replacing a roof, upgrading plumbing, or renovating a kitchen.
While these homes need attention, they often come with major advantages for buyers willing to invest time and effort.
Why Fixer-Uppers Can Be a Smart Move
Even though a fixer-upper might not look perfect at first glance, it can offer financial and lifestyle benefits that move-in-ready homes can’t always match.
1. Lower Purchase Price
Because fixer-uppers require repairs, they’re typically priced lower than fully updated homes. According to data from StorageCafe, homes that need work are priced about 29% lower on average. That kind of discount can make homeownership possible when other options feel out of reach.
2. Less Competition
Many buyers want move-in-ready homes and are unwilling to take on renovations. That means you’re less likely to face bidding wars, giving you more negotiating power and a better chance to secure the home you want.
3. Faster Equity Growth
By choosing your materials, finishes, and design, you can personalize the home to fit your lifestyle while increasing its value. Strategic improvements — like upgrading kitchens, bathrooms, and flooring — can boost your equity more quickly.
As The Mortgage Reports notes:
“If you’re a house hunter who’s not afraid of sweat equity, buying a fixer-upper could be your ticket to homeownership. Doing so could lead to big savings, even in some of the nation’s largest and most popular housing markets. Plus, adding the right features could help your investment.”
What To Consider Before Buying a Fixer-Upper
A fixer-upper offers exciting potential, but it also comes with extra planning. Before you commit, think through a few key questions.
Have a Clear Game Plan
Be realistic about your skills, time, and budget. Are you handy enough to handle small projects yourself, or will you need to hire contractors for everything? Knowing your limits upfront can help you avoid stress and unexpected expenses later.
Prioritize Repairs and Upgrades
Don’t feel pressured to tackle every renovation at once. Focus first on essential fixes — like safety or structural concerns — before moving on to cosmetic updates. Create a timeline that fits your budget and lifestyle.
Choose the Right Location
Even the best renovations can’t overcome a poor location. Look for fixer-uppers in desirable or growing neighborhoods where home values are increasing. Proximity to parks, restaurants, and schools can make your investment more rewarding.
Always Get a Home Inspection
Before closing, hire a licensed home inspector to uncover potential problems. The inspection will reveal what repairs are needed and help you estimate renovation costs. It’s one of the most important steps in deciding whether a fixer-upper is truly worth it.
Prepare for the Unexpected
Renovations rarely go perfectly according to plan. Set aside an extra 10–20% of your budget for surprises, such as rising material costs, hidden damage, or extended timelines.
Explore Financing Options
Ask your lender about renovation loan programs, such as FHA 203(k) or Fannie Mae’s HomeStyle Renovation loan. These mortgages can combine your purchase and renovation costs into one loan, but they often come with spending limits and specific project timelines.
Turning a Project Into a Dream Home
A fixer-upper isn’t for everyone, but for the right buyer, it can be a rewarding way to break into homeownership and build long-term wealth. With patience, planning, and the help of a skilled real estate agent, you can transform a home that needs work into one that perfectly reflects your style and goals.
Your dream home might not be the most polished one on the block — it might just be the one waiting for your vision to bring it to life.