The Pros and Cons of Buying a Fixer-Upper
Purchasing a fixer-upper can be an enticing option for homebuyers, offering both opportunities and challenges. On the plus side, these properties often come with a lower initial price tag and the potential for significant equity gains through renovations. They also allow buyers to customize the home to their exact specifications and potentially enter desirable neighborhoods they might otherwise be priced out of. However, the downsides can be substantial. Renovation costs can quickly spiral, especially if unexpected issues arise, and the time and stress involved in managing a major project shouldn't be underestimated. Additionally, living in a construction zone or paying for alternative housing during renovations can be disruptive and costly. Ultimately, the decision to buy a fixer-upper depends on one's budget, DIY skills, tolerance for uncertainty, and long-term housing goals.
- When you need to work on your credit. Maybe your credit score is just starting to recover, but you need more time to pay down debts for a couple of years. With rent-to-own, you could start investing in a home while you bring up your score.
- You’re close, but not quite ready to secure a mortgage. You might have a good job with a significantly bigger salary, but you haven’t been there long enough for a lender to consider it a stable source of income. Or maybe you’re self-employed and you’re still building a reliable track record. Rent-to-own allows time to build personal wealth and financial credibility while working toward your homeownership goals.
- When you know you’re going to buy when the lease expires. If you’re not ready to buy when the lease expires, then you will lose any rent credit, i.e. investment, you’ve put into the home.
