Is Buying a Fixer Upper the Key to Getting the Home of Your Dreams?

A house can be the most significant purchase a person ever makes—but buying a house needing renovations can make it a little easier on the wallet.

Buying a house (and, eventually, selling a house) is no small accomplishment. For most people, saving up for a down payment on a house is a years-long financial goal. Saving that huge chunk of money isn’t always enough, though—rising home prices and a limited supply of homes priced and sized for first-time homebuyers make it difficult for aspiring home buyers (and even people who have already bought and sold a house or two) to find the modest home of their dreams.

According to a 2019 survey from real estate site, almost 60 percent of people who hoped to buy a home that spring season considered purchasing a less expensive home that maybe needed some renovating, essentially sacrificing a few items on their home wish lists in order to buy a home. For the survey, asked more than 1,000 people who planned to purchase a home within the next year about their home-buying plans and whether they’d consider a home needing renovation.

People may choose to buy a home in need of renovation because homes in their price range may be in short supply in the area, or homes with everything these home shoppers want may be too pricy. Regardless of the reason, the majority of people are considering homes that need some work—and more than half of them are willing to spend more than $20,000 on the renovation.

Home remodeling costs aren’t cheap, but $20,000 can get any new homeowner some decent smaller updates. Larger upgrades—including a complete kitchen or bathroom overhaul—will cost much more.

Even with the costs, almost all home shoppers—95 percent of survey respondents—hope to get a positive return on their investment and expect their newly purchased home to be worth more after renovations than when they bought it. Most home improvement projects will increase the value of a home, but it’s never guaranteed. Picking the right improvements can help people get the most bang for their buck, while the wrong ones could even lower the home value.

Deciding whether it’s worth it to buy a more affordable home that needs improvements should be one of the first steps people take when purchasing a home, especially because it can help guide the whole home shopping process. Lowering expectations can make the dream of buying a home more realistic, particularly for first-time buyers. And according to the survey, most people recognize that—though whether they are truly willing to settle when it comes time to buy remains to be seen.

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