Buying a fixer-upper can seem like a romantic prospect — weekends spent peeling down wallpaper in satisfying strips, picking out sleek new appliances, and upgrading worn-out flooring with a bit of TLC. But the reality is that most fixer-upper renovations rarely go as planned.
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In fact, in a 2020 Houzz survey, 31% of respondents revealed that their renovations went over budget. In May 2021, Business Insider also reported that 44% of home renovation projects are facing delays because of supply shortages and rising material costs.
Buying a home that needs a lot of work can seem like a smart, cost-effective option in a housing market with a low inventory of affordable homes. But before you dream of renovating that dilapidated 1920s craftsman bungalow, read on to find out how to avoid having any fixer-upper regrets.
Unrealistic Expectations Can Lead to Buyer's Remorse
When Nick Derkowski — a registered nurse and the founder of TrailHead Coffee, a company that sells artisan-grade coffee — bought his home a year ago, he didn't envision how much time and effort would go into what he thought was his dream home. When he and his fiancé bought their rural three-bedroom, two-bathroom Wisconsin property for $115,000, they were pleased with the affordable home because they saw other places selling for 10-15% over the list price. However, while the initial cost of the 1,600-square-foot fixer-upper drew them in, Derkowski says he's ready to be done with the property.
"If all I had to do was fix up the house, it would be fine, but I also work 50 hours [a week] as a registered nurse," Derkowski tells Hunker. "So by the time any free time rolls around, I just don't have the energy to work on another project." He adds that though they've already fixed up parts of their new home, he and his fiancé are now planning to move out early next year. "I just want to finish up what we've torn apart and be done with it," Derkowski explains. "It's hard to live in a messy, cluttered house that's always in flux, especially [when I'm] working so much."
It's easy for homeowners to fall in love with the potential of the home, but if you can't devote a significant amount of time to the project, you'll likely end up stressed and frustrated. Being realistic about the amount of time and effort required for transforming a fixer-upper is the first step to avoiding regrets. Even if the labor is outsourced, an extensive home renovation can quickly become overwhelming.
South Florida mortgage loan officer Rose Vital says she's seen her share of clients buy fixer-uppers that they soon regret.
"I have a client who bought a home that needed a lot of work, and two years later she's still working on the house," Vital tells Hunker. "Over the years, I've seen clients buy homes and renovate them, and while they love the home when it's done, most of them say 'never again.' Everyone's looking for a good deal, but most people are unprepared for the underlying issues they find when they start tearing things out."
How Television Plays a Role in Fixer-Upper Fantasies
Part of the appeal of a fixer-upper can, of course, be traced to pop culture. After all, some of the most popular home improvement shows depict owners and investors flipping homes in 30 days or less, and viewers don't always see the amount of effort and money that it takes to successfully remodel a home. For many, fixing up a space can take months or years, and it's often much more expensive than initial estimates.
John Bodrozic is the co-founder of HomeZada, a digital home management system, and warns that most people fall in love with the "after" reveal on home shows and are unprepared for the "before" undertaking.
"Home renovation shows create the false impression that doing all these projects is a fun, exciting process," Bodrozic tells Hunker. "Sometimes you have to find a different place to live while the home is being remodeled, which can be much longer and [more] expensive than people think. Managing the financial aspects of determining your budget, finding the money to pay for these remodels, and making sure you get what you can afford requires a lot more planning than the home renovation shows imply."
Derkowski says that because of idealistic TV shows, he was also sucked into the illusion that his fixer-upper project would be much easier than what it turned out to be.
"We're big fans of HGTV, and yes, I do think it played a role in us taking on this project. We really enjoy Flip or Flop, Love It or List It, Holmes on Homes, and many other renovation TV shows," Derkowski explains. "So far, we've probably invested $15,000 [in our own fixer-upper]. We've redone about 1,000 square feet of flooring, repainted walls, bought new cabinets, and installed all new appliances. More so than the money, we have invested so much time not only working on the bits and pieces that go into renovating a house, but also figuring out how to do it."
How Homebuyers Can Be More Realistic About Their Fixer-Upper
While television shows may make buying a fixer-upper look glossy and fun, it's a demanding project that requires lots of cash and even more patience. Vital advises homeowners who are set on a fixer-upper to begin the process with an honest and thorough inspection.
"Get a licensed and reputable inspector who will tell you the truth, who can really dig into all the major issues," Vital says. "If you cut corners with an inspection, especially with a fixer-upper, it's going to cost you more money down the road."
With a competitive real estate market, homebuyers may be tempted to go the fixer-upper route in the hopes of saving money, but depending on the kind of fixes that are needed, it may make more sense to buy a home that doesn't need major upgrades. A higher list price on a home may mean the difference of $100 a month on a 30-year mortgage versus thousands of dollars coming out of pocket for an unseen emergency when renovations start.
"Almost all homebuyers underestimate the total cost of the remodeling projects they want when buying a fixer-upper," Bodrozic says. "This results in the homeowner being way over budget on the sum of all their projects, which puts financial stress on the homeowner, or they end up only doing a portion of the projects they want based on what they can afford and then have to live with aspects of the home that they really don't like."
While we're not completely ruling out a fixer-upper purchase, getting a thorough inspection and having realistic expectations about the budget and timeline can help homeowners avoid regretting their purchase later on. Plus, it helps to remember that what you see on TV isn't always reality.