There are benefits to both. And, the most heavily weighted opinion when planning your next property purchase should be your own (and that of those you trust). Every situation is different, but below, we’ve put together some guidelines that may help you decide whether to purchase a fixer-upper, or a turnkey home.
Considering Your Budget…
One of the most important (and often one of the first) decisions that you will make on the property market, is how much house you can afford. Regardless of the type of property you plan to purchase, you never want to overextend yourself. Especially on a fixer-upper.
It might seem to go without saying, but for a fixer-upper the purchase price should be nowhere near the top end of your budget. Depending on the amount of work you want done and the severity of repairs to be addressed: you should leave about 40-60% of your budget for renovation work. Try to come in a little shy of your total with these estimates as well. You can’t really plan for surprises, but the best way to do so is to leave a little wiggle room.
Even with a turnkey home, it’s beneficial to stay at least a little under budget. There are a lot of costs involved with the purchase of a home; furniture, decor, changing out hardware or faucets, landscaping, and other small aesthetic changes. Coming in under budget also makes it easier to add a pool, deck area, and other features later on.
How’s Your Timeframe?
“Fixer-upper” can be a fairly broad term. Sometimes, it’s a home that is just aesthetically unpleasant. Other times, it is a home that’s dangerously unable to be occupied.
Most fixer-uppers fall somewhere within this spectrum, and require some length of renovation period before they become your dream home.
If you need to move quickly, a turnkey or strictly-aesthetic-fixer-upper is your best bet. You can live in a visually unpleasant home while aesthetic updates are performed, but some fixer-uppers take a lot more time to get to a point where they are safe to move into.
You (and a building professional) must determine what needs to be done for the home to get to a place of legal and comfortable occupancy. Then, plot these projects out on your timeline. Do they match up?
If you have a date you must move in by, a turnkey home might be the safer bet (as you’re guaranteed no unexpected surprises). If you’re planning this move in advance, and time is on your side: you can explore a much wider range of options.
Making Your House a Home
If you have the budget, timeframe, and trustworthy network of professionals: go with a fixer-upper. Purchasing a property below budget, allows the remaining portion to be used inside (or out) to make your new space: yours. It can be much a more exciting and rewarding investment when you are a part of the process.
However, a turnkey home will still become yours through furniture, decor, and other personal touches. And again, leaving room in your budget allows you to make larger tweaks to your move-in ready space over time.
There’s no specific formula or equation that can help you decide whether to purchase a fixer-upper, or a turnkey home. Both are viable options; in different scenarios, for different people. Regardless of the direction you decide to go, it is important to consult with a range of design and construction professionals along the way. Incorporate trustworthy individuals and businesses with a deep understanding of the industry into your process.
Looking for some more insight on the topic? Try this article from MarketWatch.
Thinking about going with a fixer-upper? Purchased a turnkey home, but ready to change or add something? Reach out! We’d love to be a part of your process.