Lately Tag and I have been hooked on watching Property Brothers on HGTV. The show is about two brothers, a realtor and a general contractor, who team up to find people fixer-uppers and then help them buy and fix the house all at once.
If you are even thinking about buying a home at any time in the future and don’t have a boatload of money then this is must see TV as far as I’m concerned.
The great thing about this show is that it shows how you can get aspects of your dream home at a fraction of the cost of what a dream home might cost you. Plus doing a custom renovation means you get EXACTLY what you want (as long as the contractor does what you ask).
Cheap House With Renovations or Expensive House?
When I’m looking for a home in about two years, I’ll have two options: either get a fixer upper for a low price and pay a bunch of money to renovate parts of the home, or buy a move-in ready home for a higher price.
Property Brothers is all about people buying that crappy house and turning it into a dream home. I like this strategy for a few reasons:
- I like to work with my hands and I’d be happy to help on the renovation (which would also reduce costs).
- The renovations will help increase the value of the home.
- I could get exactly what I want with the custom renovation.
I’d Need the Magic of TV
I do really like the idea of getting a fixer upper, but there are two things that happen in the TV show that I would need in real life to feel comfortable doing a fixer-upper renovation.
First, I’d need to see a computer generated design like they do in the show. Here’s the software they use to give people a great visual of what the house would look like when the renovation is over. Without seeing this I would never be able to visualize how a home would look after the renovation were done.
Second, I’d need a contractor I can trust to deliver what he promises on budget. Obviously that always happens on the TV show, but the Property Brothers do their show in Canada and I’m not moving there. Finding the right contractor would be the most important part of the whole entire process.
Getting your appliances repaired by a local expert like appliance repair in mesa is another thing you can do to save some money. Buy new appliances only if it is necessary.
I Have Two Years to Decide
Luckily I don’t plan on buying a house for at least two years so I have some time to decide, but I’m curious to hear about anyone who has some experience with renovating a house. If you’ve done a big renovation in your house, let me know in the comments what happened and if you’d do it again.
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Kevin McKee is an entrepreneur, IT guru, and personal finance leader. In addition to his writing, Kevin is the head of IT at Buildingstars, Co-Founder of Padmission, and organizer of Laravel STL. He is also the creator of www.contributetoopensource.com. When he’s not working, Kevin enjoys podcasting about movies and spending time with his wife and four children.
Here’s the thing. Most “average” houses don’t require significant renovations like you see on Property Brothers. Most just need cosmetic upgrades which, any DIYer will tell you, are easy, but require a lot of work.
The biggest problem with the houses on that show is the layout. They always end up blowing out a few walls to make a huge open space that’s great for “entertaining”. Everyone wants to “entertain”. If you can find a house with a great layout, but requires a lot of upgrades, those are the best deals (especially if they are foreclosures).
My boyfriend and I have completely renovated the house I own. Finding a trustworthy contractor is the hardest part. We have done a significant portion of the work ourselves. The most frustrating part is I would only want them to do one complicated portion and we would do the finish work. Most contractors want to do it start to finish or they will push you aside for bigger projects. It always takes longer than you anticipate. Living in a construction zone sucks. The reward was worth i thought. When you do buy a house most renovation magazines recommend living in the house for a year so you can figure out how you will use the space. I second this advice. When I designed my kitchen to get an idea of how the layout would look I used the Ikea design software. I hand drew my half bath (which turned out phenomenal!) I also layed out the room with painters tape on the floor. Be creative and flexible. I made a “sunroom” out of a back bedroom. Originally I was searching for a good deal on vinyl windows from the big box stores when my mother saw a set of 6′ tall Pella windows for sale on the side of the road. I ended up with 3 reasonably new aluminum and wood windows (with screens!) for $150 because a guy in a mansion decided to put in French doors. My ugly retrofitted steel front door was replaced with a $99 antique store find. Do not be afraid to take down plaster or drywall. Learn to drywall! Wiring, plumbing and insulating an open wall is 10x easier than trying to work without disturbing it. Drywall is cheap! Don’t ever pay full price for a ceiling fan or lighting fixture either. The market I live in is pretty cheap so I probably have put in more than I should on my house. I wouldn’t change a thing though. Currently my minimum mortgage payment is less than the rent on my first apartment (which was $500!).
My boyfriend and I have completely renovated the house I own. Finding a trustworthy contractor is the hardest part. We have done a significant portion of the work ourselves. The most frustrating part is I would only want them to do one complicated portion and we would do the finish work. Most contractors want to do it start to finish or they will push you aside for bigger projects. It always takes longer than you anticipate. Living in a construction zone sucks. The reward was worth i thought. When you do buy a house most renovation magazines recommend living in the house for a year so you can figure out how you will use the space. I second this advice. When I designed my kitchen to get an idea of how the layout would look I used the Ikea design software. I hand drew my half bath (which turned out phenomenal!) I also layed out the room with painters tape on the floor. Be creative and flexible. I made a “sunroom” out of a back bedroom. Originally I was searching for a good deal on vinyl windows from the big box stores when my mother saw a set of 6′ tall Pella windows for sale on the side of the road. I ended up with 3 reasonably new aluminum and wood windows (with screens!) for $150 because a guy in a mansion decided to put in French doors. My ugly retrofitted steel front door was replaced with a $99 antique store find. Do not be afraid to take down plaster or drywall. Learn to drywall! Wiring, plumbing and insulating an open wall is 10x easier than trying to work without disturbing it. Drywall is cheap! Don’t ever pay full price for a ceiling fan or lighting fixture either. The market I live in is pretty cheap so I probably have put in more than I should on my house. I wouldn’t change a thing though. Currently my minimum mortgage payment is less than the rent on my first apartment (which was $500!).
A first fixer-upper is an educational experience.
Educational experiences tend to be really time-consuming, and more often than not, expensive. Make sure you really have the time and resources before you start,
A first fixer-upper is an educational experience.
Educational experiences tend to be really time-consuming, and more often than not, expensive. Make sure you really have the time and resources before you start, otherwise it can become even more “educational.”
I am about in the same position as you and have started volunteering for Habitat for Humanity… might as well learn how to do renovations/construction on someone else’s house.
I bought a house that was good for us but needed some updates. We are slowly updating it as time goes on. We probably saved a decent chunk by buying a house out of the 80s and since we do the work ourselves over time we aren’t spending cash we don’t have and we are leaning in the process. Should help out immensely if I decide to become a landlord one day!
The real decision comes down to wether you have cash or need to finance, which than you can decide between ” getting fixer upper for a low price and pay a bunch of money to renovate parts of the home, or buy a move-in ready home for a higher price:.
Say you’re deciding between a $350k move in ready, vs. a $200k than you’ll put in $100k worth of renovations so you get your dream home for $50k cheaper.
If you’re taking out a mortgage, I would rather leverage myself for the $350k home rather than using cold hard cash to pay for the renovations.
If you have cash to pay for either decision, than I say go for the fixer upper.
My first house was a fixer! We bought it when my wife and I were in our late twenties. As you get older, you do not have the time and energy to fix up a home yourself. It was worth it because we resold it for double 3+ years later.
My wife and I spent a year watching DIY network and getting pumped to buy our first house and fit it up and add sweat equity (our favorite show). Then we bought the house and realized that it is really hard and time consuming, even for a handyman engineer like me. No regrets, but I have given in to hiring the contractor/builder who lives a couple houses down.
We bought a house that was move in ready with all new renovations. We did this just because we knew we would be too busy for 3-4 years to do anything, and we needed a place that was ready to live in. However, the next place I wouldn’t mind it being a fixer upper.
Another thing to consider is that unless you are buying a brand new home that is exactly as you like it, even a 5 or 10 year old home is going to need updates and other repairs in the not to distant future. Within a decade of purchase, you could easily see yourself spending tens of thousands replacing appliances, flooring, fixtures, roofs and HVAC appliances.
I think the total cost of home ownership can be the same over the long term regardless of whether you need to do renovations right away or not. Personally, I prefer to keep busy with projects around the house, so I know that my first house will be a fixer upper that will give me years of weekend projects.
As nyliguy said, it might be easier to amortize a perfect property over 20 or 30 years than have a small mortgage but spend an additional chunk of cash every once in a while to do a improvement. While that might be true for some, I would rather have lower monthly payments and save the difference for each individual reno project. When interest rates spike, or in the event that I should lose my job, I would feel far more comfortable to be able to put off home improvements that to soak my worries away in a Jacuzzi tub in my master bath. 😉
Good point David, regarding being on the hook for a higher mortgage payment if you’re leveraged in a move in ready home. I agree much easier if you lose your job to hault renovations for awhile than being obligated to a higher mortgage in a move in ready home.
If we’re talking about having the 100% cash already saved to do the renovations out right on a fixer upper….I would still opt to leaving my cash in the bank and buying a more expensive move in ready home. That way I have a cash cushion to weather through a job loss and still pay the mortgage.
If you’re talking about not having the cash, and doing the renovations over the life of 30 years, than yes buying a fixer upper if more affortable and a safer option.
Oh man kevin, lets hope that I dont go on a huge rant.
I will have to say that your strategy is a good one – my wife and i found a location in our town that we liked, and then bought a total fixer-upper in the area. The bones of the house were good, but it was occupied by a 92 year old woman who happened to be the original owner/builders daughter!
So much needed updating – total kitchen teardown, total bathroom tear down, electric wiring needed to be completely replaced and brought up to code, plumbing needed work (still does).
As you can see, it’s a LOT Of work, and basically all of those projects listed above, we elected to start at the same time (mistake). I think you could have a lot of fun and learn a lot if you did all this yourself, but dont bite off more than you can chew, and realize that it will cost more than you think.
Here’s the other thing with buying a fixer upper and doing it yourself:
DIY projects seems like fun and rewarding, but they get old.
After 2 years of doing a project or projects every weekend, you may find yourself saying F it and looking for your next house to be completely turnkey.
I say this from experience. We bought a foreclosure and put in a lot of time and money into getting up to our standards. It’s 4 years later and there is still a long to-do list, even though we plan to sell next year.
Needless to say, we want our next house to be as move-in ready as possible.
I can only relay my experience so far. We bought a house in 2003 that was the lowest priced fixer upper in a neighborhood considered to be high end. Also, the houses in this neighborhood are historical so there are some tax credits for certain work that you do on the house. This is our third house and we thought we’d be on a five year plan. Our kids were in very early elementary school when we moved in. It has been a lot of work and money and time spent and we are not nearly where we thought we’d be. Throw into the mix an aging parent with Parkinson’s and dementia that lived 8 hours away, kids activities, uncontrollable economic conditions (i.e. me still looking for a job since 2008 – long story but I was freelancing and took time off while my parent was ill then after they passed still haven’t found anything and my freelance connections are in industries that haven’t fully recovered from the recession) So, now we have to think about college costs and instead of enjoying life and taking some trips with our kids we were always working on the house. If I had a do over I wouldn’t get a fixer upper. That is just me. If you can do a lot of things yourself and are disciplined with your time then it might work out for you. I agree with Tom, one can get weary from the projects and all the unexpected things that are found along the way. Now we still aren’t done with everything and would like to sell yet probably won’t recoup all we put into it. We didn’t even take any fun vacations with our kids and just did little local things. Time and memories are priceless and way more valuable in my book now.