In the market for a new home, but not sure on whether you should buy a new construction home or a fixer-upper? A lot goes into the entire process, and it can be stressful. There are so many factors that go into play when deciding on a home such as location, school districts, neighborhood, price, renovation costs, and more. I can’t tell you either buying new or a fixer-upper is best because it all depends on what you are looking for and how much you are willing to spend, but I can tell you that there are benefits and drawbacks to both.
A lot of people think that buying new is always better, but when it comes to buying a house that isn’t always the case as far as your investment goes.
When buying a new home you can rest assure knowing it is free of any structural, roof, or foundation deterioration and damage. This is a plus if you are not wanting to take the risk with an older home. Contractors also have to be up-to-date with codes and regulations which means the house will be safe, secure, and energy efficient.
One of the best benefits to building new is a desirable style and layout. Contemporary floor plans make sense for the modern world. The trending open floor plans have no bizarre spaces that are hard to utilize like older homes. There is also no risk of asbestos, lead-based paint, or any other unsafe materials that were used in the construction of pre-70s houses.
With all new construction homes, there comes a price too. For the many who are tight on cash, new construction may not be the best option for you. Trying to afford a new construction home may also take you away from the location or school district you originally wanted, making your commute longer.
The reason why a lot of people choose to buy a fixer-upper is because of the lower upfront costs. The lower the purchasing price, the lower your property taxes are too. You just have to keep in mind the money you will need to put towards the renovations. There are many fixer-uppers out there that can be appraised for more than you think once it’s renovated. With the lower buying price of a fixer-upper, you are more likely to find a home in the location you want. Plus, if you happen to buy a historic house, you may qualify for investment tax credits which will go toward restoring your property.
Fixer-uppers do take more time to turn it into the home of your dreams compared to buying your dream home new. You also have to watch out for hidden issues such as mold or faulty electrical wiring that doesn’t pass today’s codes. Make sure you have a contingency fund for any problems you may run into.
Talk to an experienced contractor before trying to DIY and YouTube your way through it. Getting an FHA 203K loan (construction loan), and having a general contractor complete the work may be your best bet to be certain you meet building codes and have the work done right the first time. Don’t be scared of the word loan for a renovation. The scope of work has to be spelled out for everything so you know exactly what money is going where, and inspections are done to make sure the technical work is being done correctly.
The best way to decide whether a fixer-upper or building new is right for you is to do the good ole pros and cons list. Know your budget, the location, and any other must haves when making your list. Neither one is better than the other really. It all depends on what you are willing to put in, both money and time wise. If you are seriously considering a fixer-upper, great! Floyd Renovations has the program for you. We have a core group set up to help you buy and fix up your dream home, along with 3D renderings and virtual walkthroughs. Give Floyd a call today at 636-922-3569 to see just what we can do for your next fixer-upper. The possibilities are endless with Floyd Renovations!