For many Americans, buying a home is a rite of passage. It is a symbol of independence and financial stability. In fact, according to the Federal Reserve’s Survey of Consumer Finances, 65.2% of families owned their primary residence in 2013.
Now, if you are thinking of buying a home there are important decisions that you have to make. Among these is whether you want to buy a move-in ready home or a fixer-upper.
Simply put, a move-in ready home is complete when you move in. A fixer-upper, on the other hand, is a property that will require repair (redesign, reconstruction, or redecoration), explains Derek Dawson of Dawson Property Management. Each option has its pros and cons.
Pros of Buying a Move-In Ready Home
1. Newer homes tend to be more energy-efficient.
More and more homeowners are buying new builds over older homes because of the savings in energy and money. In fact, according to the Energy Information and Administration, homes built after the turn of the millennium were more energy-efficient than previous ones.
2. Financing for move-in ready homes is easier to obtain.
It’s often easier to secure financing for a move-in ready home as opposed to a fixer-upper. That said, your odds will obviously depend on things like your residential income, down payment, credit history and more.
3. Move-in ready homes come fitted with high-tech features.
As opposed to fixer-uppers, new homes come with modern features aimed at meeting today’s lifestyle demand. Good examples of such elements include hardwood flooring, barn doors, and walk-in closets.
As for high-tech features, internet wiring, speakers, and security systems are some of the common ones.
4. Move-in ready homes require little transition.
With move-in ready homes, there isn’t any maintenance work needed. You don’t have to refresh the walls with new paint, demolish some walls, or remove toilets. You get to enjoy the home as soon as you are done purchasing the home.
Cons of Buying a Move-In Ready Home
1. Newer homes lack unique architectural details.
Old homes have unique charm and character; this character can be an incentive for some home shoppers. While not all home buyers are enamored by this, some love those distinct details about the home attractive.
2. Move-in ready homes give you little freedom for customization.
Every homebuyer wants their dream home to be perfect. However, when it comes to move-in ready homes, there will always be some give and take. You may find you love the hardwood flooring and the master bath, but your significant other may have a few issues with the brand-new kitchen.
Unless you’re into the whole DIY scene or have money to pay for remodels, the existing designs may have to stay as-is.
3. Move-in ready homes are expensive.
Move-in ready homes are often more costly than fixer-uppers. If they were not, few to no people would consider buying fixer-uppers.
Pros of Buying a Fixer-Upper Home
1. You can tailor your house to your exact tastes.
With a fixer-upper, you’re buying a blank canvas. If you want to go bold in the kitchen, you can do it. If you want an open concept, you can do that too. Yes, it means more work, but the power you have can certainly not be overlooked.
2. Fewer taxes.
Are you looking to buy a historic home? If so, you can save on your biannual property taxes. You may also be eligible to claim an investment tax credit for qualified rehabilitation costs, according to the American Financial Resources, Inc.
3. Fixer-uppers generally cost less.
Without a question, price is one of the biggest advantages of purchasing a fixer-upper. Fixer-uppers allow eager homeowners who’d otherwise not have the finances to buy a new home.
Properties that require work are almost always priced accordingly, as the potential owner understands some work may be necessary. As such, the sale price is typically lower than the potential market price. Therefore, purchasing a fixer-upper makes the perfect sense for those not in a hurry to move in.
Cons of Buying a Fixer-upper
1. Costs of remodeling could outweigh the savings.
That’s why you need to do proper research prior to purchasing a fixer-upper. Remodeling costs outweighing the initial savings isn’t a rarity in home improvement projects. So, before you write that fat check, make sure to check up the average remodeling costs of your project.
2. Brace yourself for surprises.
You can’t know what is around those pipes or behind those walls until you open them up and get to work.
3. Fixer-uppers require more work and time.
Demolishing a room, painting a bedroom or removing an old toilet can take months until the home is move-in ready.
Is there a clear winner between a move-in ready vs. a fixer-upper? Of course, there isn’t! As such, examine the pros and cons to see what best suits you and your family.