Pros and Cons of Buying a House in Need of Work

Are you purchasing an investment property or your principle residence? Does the house require general updating or extensive renovations? The experience of flipping a house for profit differs greatly from renovating your home while you are living in it. I recently finished renovating the entire main floor of my home and also flip houses as a side business. For most scenarios, the pros and cons of buying a fixer upper are as follows:

PROS

1. Cost- Buying a house that needs work is cheaper than buying a house in pristine condition. If you are currently living in an apartment, paying monthly rent, a fixer upper house may be an alternative you can afford.
2. Style- When you renovate a home, you can select features and colors that you desire. If you buy a house in good condition, you will probably leave the house the way it is.
3. Pride- Putting your blood, sweat and tears into a house can make it feel like a home. Even painting the walls in colors you appreciate can change the atmosphere and give you a sense of pride in ownership.
4. Location/Features- You may be able to purchase a fixer upper house in a neighborhood or with features that you would normally be unable to afford. If living in a particular area or having a gigantic property is on the top of your list, you may be willing to sacrifice the condition of your home.
5. Investment- Many people make a good living fixing up houses for profit. If you renovate your home well, there is money or equity to be made.

CONS

1. Time- Whether renovating an investment property, or your principle residence, it will require a great deal of time. Choosing and buying supplies, completing the work, dealing with the finishing touches and even choosing a contractor can use up valuable time.
2. Knowledge/Skill- The average person does not have the required knowledge of electrical, plumbing, dry walling or flooring to be able to complete a major renovation. Unless you are a professional, or have prior experience in renovations, the task may be insurmountable.
3. Energy- Do you come home from work and watch television until bed? Even if you have the spare time available to complete a renovation project, if you are not accustomed to manual labor or working long hours, it is easy to burn out.
4. Money- Estimate the cost of your renovations. Do you have enough money or credit available to complete the project? If you purchased a fixer upper because you could not afford a house in good condition, you may need to postpone the renovations until you accumulate some equity.
5. Chaos- Major renovations can mean you will be living in a house without water, power, a kitchen or even a bathroom. The house may be dirty, dusty or even unsafe for children to reside. Living in a home that is under renovations can feel like more than just an inconvenience.

There are many advantages to buying a fixer upper including the cost of purchasing your home, molding a house to your particular style, having a sense of pride in the work you have completed, being able to afford a house in a location or with features that would normally be unobtainable for you and the possibility of a great return on your investment. Before taking on this task, however, you will need to consider the time you have available for this project, the knowledge or skill level you are likely to need, the energy you will require to complete it, the money you are willing to dedicate and the degree of chaos your family is willing to live with. House flipping is something I enjoy. If I ever decided to buy another principle residence in need of work, I think I would bridge mortgages and move in when the renovations were complete. With two small children at home, it was lucky we all survived the ordeal.