Should I Buy a Fixer Upper or a Turnkey Ready Home?
understanding the pros and cons of each option
Debating whether to buy a turnkey ready home or a fixer upper can be overwhelming. But there are clear benefits and risks to each option - this video will help you decide which route to go, based on your lifestyle, goals, finances, and personal preferences.
More of a reader? Catch the video transcript below!
Today, we're diving into the age-old debate: Should you buy a fixer-upper or go for something that's turnkey ready? Buckle up because we're about to explore the pros and cons of both options and help you make an informed decision.
The Fixer-Upper Advantage:
Affordability: One of the major perks of choosing a fixer-upper is the lower price point. These properties generally come with a more budget-friendly cost compared to turnkey options.
Personal Touch: Buying a fixer-upper lets you put your personal stamp on your new home. Whether it's choosing paint colors, redesigning bathrooms, or overhauling the kitchen, you have the creative freedom to tailor the space to your preferences.
Sweat Equity: Ever heard of sweat equity? It's a real thing! When you invest your time and effort into remodeling and renovating, you're essentially building equity in your home as the value increases due to your hard work.
The Fixer-Upper Challenges:
Complexity and Stress: Dealing with contractors, managing renovations, and possibly living elsewhere while work is ongoing can be a real headache. The process can be stressful and time-consuming.
Unexpected Issues: Fixer-uppers can reveal unpleasant surprises as you peel back the layers. What might start as a simple project can quickly escalate if you uncover structural, electrical, or plumbing issues.
Financial Considerations: Besides the initial purchase cost, financing renovations can be a challenge. Coming up with the extra funds for repairs and improvements can strain your financial resources.
The Turnkey Attraction:
Convenience: Turnkey homes are all about convenience. You purchase a property that's ready to move into, requiring little to no additional work. Just turn the key and settle in!
Low Maintenance: With updated systems and finishes, turnkey homes often come with fewer maintenance concerns. You're less likely to face major repairs in the near future since many components have already been upgraded.
The Turnkey Drawbacks:
Higher Price Tag: The most significant drawback of turnkey properties is their higher price. The convenience and time saved often come at a premium, which might stretch your budget.
Quality Concerns: Since you didn't oversee the renovations, you might be unsure about the quality of work done behind the scenes. Hidden issues could arise down the line due to subpar construction.
Lack of Personalization: While everything might look great, the design choices made by the previous owner might not align with your taste. You could find yourself living in a stylish home that doesn't quite feel like "you."
Making the Right Choice:
The decision between a fixer-upper and a turnkey property is highly personal. Your lifestyle, goals, and financial situation play a crucial role in this choice. From a financial perspective, opting for a fixer-upper tends to make more sense.
Pro Tip of the Day
A year ago, in the vibrant Tierra Santa area of San Diego, our client was on the hunt for their perfect townhouse. Now, this was no ordinary market – it was a competitive landscape where remodeled townhouses were commanding around $830,000. Multiple offers were the norm, and our client was facing hurdles in securing a property within their budget.
Then, a game-changing moment arrived. A townhouse of the exact same model surfaced in the same complex. However, this one had a unique story. It had stood untouched for two decades, a rental property in need of a complete overhaul. Yet, its price tag was substantially lower – listed around $700,000.
Our clients decided to take destiny into their own hands. They purchased the property for $710,000, recognizing its hidden potential beneath its outdated facade. With a clear vision and determination, they embarked on a remodeling adventure. They orchestrated renovations, managed professionals, and brought their dream to life.
After investing approximately $30,000 into renovations, the townhouse underwent a breathtaking transformation. It emerged as a contemporary masterpiece, rivaling the aesthetics of the $830,000 listings.
The most incredible part of this journey? With an initial investment of $710,000 for the property and roughly $30,000 for renovations, our clients found themselves holding a home comparable to those listed at $830,000. In a matter of weeks, they uncovered $80,000 to $90,000 in equity.
This story serves as a testament to the power of opportunity. It illustrates how strategic choices, even in the face of challenges, can reshape your financial landscape. By transforming a fixer-upper into a valuable asset, our clients showcased the essence of real estate investment.
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