Buying a home is a big decision. Existing homes that need a little TLC are a bargain, but the glamour of new construction is undeniable. If you’re in the market for a home, but are on the fence about buying a fixer upper or building a new house, consider the advantages that renovating an existing property can offer.
A property in need of love and attention can pave the way to homeownership at a price you can afford. The initial price is typically lower and you can spread the cost of improvements over time. When opting for a fixer upper, make sure the price of planned improvements doesn’t exceed what you can reasonably expect to recoup in resale value, but any elbow grease you put in personally will reward you with enough leftover cash for a well-deserved vacation.
Existing properties also offer tax benefits. The value of new construction typically offsets the benefits of choosing to build in low tax areas. Invariably, when the taxes on a new home go up, it can inflate payments beyond your budget. A fixer upper gets you into a house that that may be more than you could afford new, but the value of the home will increase as you make improvements. Tax valuations, done only periodically, tend to lag behind, costing you less while you make renovations.
Chances are that your dream home is more than just a house. It’s a bigger picture that includes a location that will meet your needs for years to come. Land for new construction isn’t necessarily hard to find, but as the suburbs sprawl, it is getting increasingly difficult to find affordable parcels that are both convenient and well-appointed. An existing fixer upper in the right place can be renovated, but once new construction is built, you’re stuck with the location.
A fixer upper will need work. Large projects such as replacing kitchen cabinets and laying new flooring can have you feeling nearly homeless for weeks at a time. Old appliances may need to be replaced and even the best planning may not avoid cost overruns, but does this make new construction preferable?
When a new home is ready to move into, you can expect a honeymoon period, but building a new home is a laborious and often frustrating process that can take up to year to complete. Meanwhile, you will be paying the expenses associated with two different properties and within years of moving into a new house, repairs will be rearing their ugly heads and updates will need to be made.
Some things are worth waiting for and if your needs are very specific, new construction can be a reasonable option, but for the majority of home buyers, a fixer upper with good bones in a great location offers significant cost savings and convenience without sacrificing the opportunity to live in a home that is truly your own.
Buying a home is a big move. Bright new houses or fixer uppers with character both have appeal, but if you’re on a budget, a property that needs a little care may the way to own a place of your own with payment that don’t own you.