Buying a home that’s in need of renovations can be an excellent cost saver, but it isn’t always the right choice for everyone. On the one hand, they can be time-consuming and come with hidden costs that can equate to quite the surprise. But if you’re prepared for the unexpected and have a proper plan in place, you can receive all the financial benefits that a fixer-upper can provide. To help determine if it’s the best option for you, here are some pros and cons of buying a fixer-upper that you should review before making a decision.
A fixer-upper will likely need repairs, painting, and a number of other upgrades as soon as you move in. If you haven’t factored in the costs accurately, you could end up spending far more than expected. If you don’t have enough room in your budget for the renovations you need, you could end up stuck living in a home that is potentially unsafe for you and your family.
Renovating is also time-consuming. If have a busy career or dependent children, it may be more trouble than it’s actually worth if you are trying to restore on your own. A DIY renovation project can take months and sometimes years to complete if you don’t have the time to focus on the project every day.
To Save More
A home that comes with some wear and tear will, of course, sell for a lower price compared to a new home or improved property. So if you can live with a few imperfections, you can save a lot of money off of your purchase price. And in many cases, this can help you get into a nicer area for less than what is typically offered.
Add A Home Addition
If you have any of your budget left over when you buy a fixer-upper, you might have enough to put on a new addition to your home. If you’ve dreamt of having a double car garage, rental space, or an inground pool, now you can custom build it to suit your own personal taste.
Make A Profit
If you find a fixer-upper in a great neighbourhood at a bargain price, you can make a profit on the market. All you need to do is wait for the market conditions to increase and sell the home.
Equity For Your Improvements
The most attractive benefit of buying a fixer-upper is that you may be eligible to have your renovations rolled up into the mortgage amount. Yes, that’s right! Through the Purchase Plus Improvements Program, you can get the money that you require for your renovations added onto your mortgage. All you need to do is get an approval on the house “as-is” and then receive a quote for the work. A mortgage advisor will then have your mortgage approval revised to include the price of the improvements. And once the work is complete and an appraiser approves it, you will receive the funds to pay the contractors.
At The Mortgage Advisors, we can help you decide if a fixer-upper is right for you. We can also help you take advantage of the Purchase Plus Improvements Program so that you can get the money to take care of all the renovation work you need. To find out more, contact us today!