Move in ready or fixer upper?
Andrew Hall
July 7, 2013 in Other
My wife and I are looking to purchase a new home and wanted to get some advice. Should we spend a little more on a property that is more 'move in ready' or should we get a fixer upper that costs less and use the remaining budget on upgrades and customizing the home to fit our needs? How would you approach this from a budgeting perspective? Thoughts?
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nasmijati
I would look at many more variables than the two you have mentioned.
Safety:
Contact the police department of the city where you are looking for a home. They can give you crime rates by type and zip code (burglary, murder, drug trafficking, sex crimes - including number of registered sex offenders).
Age demographics:
If you and your wife have children, look at the school(s) in the neighborhood you are considering. Is there a park, a playground, a public library? Is the neighborhood one with other young families, families with children in high school, mostly retired people? Who do you want for neighbors? You will probably be living in the house you buy for a long time.
Social demographics:
Are all of the houses in the neighborhood "fixer-uppers?" Why? Are many people unemployed? Are there liquor stores very nearby with inebriated people wandering up and down the street asking for money? Do you think your building supplies will be stolen during the night if you are not on the premises?
Economic:
Are the businesses in the neighborhood thriving, or not? Are the buildings well maintained, or in need of repair (broken windows, etc.). Are the parking lots well-lit and clean or are they rather dark and trashy? Stop at a grocery store, a gas station, and other places you would be shopping and doing business if you lived in the neighborhood. Are these places acceptable to you?

I would rather you think of these things before you buy a house rather than learn the hard way afterward.
July 7, 2013 at 10:48am   
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Linda
This is as much of a lifestyle decision as a budget matter. Are you and your wife the type who like to be involved in projects? Do you have kids at home, work lots of hours, travel often? How do you spend your free time? Even if you hire out the work, there's still lots of decisions to be made when working on a house. Also, how closely do you share priorities and tastes? Buying and owning a house is a series of compromises so if you think remodeling or decorating is any easier than finding the perfect house already finished, you may be surprised. You have more choices when you're doing or directing the project, but that's not always a good thing

As far as the budget goes, buying a finished house can be cheaper than having someone else do the work. If you buy a recent rehab, the person doing it probably has done multiple projects and has the contacts and/or crews to get work done at a reasonable price and quality. In that case, it is just a matter of finding a house you like. You, as a naive, new homeowner, without years of experience and other future projects to to entice a subcontractor, are probably going to pay more for individual pieces of work.

Are you the sort of person who can save up money and pay cash to a contractor? If you find it difficult to build a sizable savings account, you may be better off buying a finished house and financing the improvements in the initial pricetag. If you're a saver with the patience to scout bargains, buying and fixing a property might be a good choice

In other words, what's right for someone else might not be right for you...it all depends on your circumstances and personalities.
July 7, 2013 at 1:38pm     
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