Fixer Upper: Traveling Home Renovations?

Fixer-upper homes are an increasingly popular option for buyers looking for a bargain in a hot housing market. These properties require repair, redecoration, or reconstruction but can usually be lived in as-is. They are often sought after by buyers looking to increase the property's value or those seeking a budget starter home. Texas, California, and Florida are the most popular states for fixer-upper homes, with Mississippi having the highest percentage of fixer-uppers among all states. While fixer-uppers can offer a great opportunity for customization and profit, they also come with challenges, such as unexpected issues and expensive renovations.

Fixer-upper homes are more common in some states than others

Fixer-upper homes are those that require varying degrees of maintenance work and are typically offered at a low purchase price. They can be a great option for those looking for an affordable home in a competitive housing market. However, it's important to remember that purchasing a fixer-upper comes with its own set of challenges, such as the need for major DIY projects or renovations.

According to research by Rocket Mortgage, some states have a higher prevalence of fixer-upper homes than others. The research analysed geotagged data points from social media and listing data to determine the locations with the most fixer-uppers for sale. Here are some key findings:

• California, Texas, and Florida were the top three states with the most #FixerUpper posts on Instagram between February 2021 and February 2022. This suggests that these states have a high number of fixer-upper homes and a lack of affordable turnkey homes.
• Mississippi had the highest percentage of fixer-uppers among all states, with over 1.6% of listings carrying a fixer-upper label. Rural states like Oklahoma also had a significant number of fixer-upper listings, which could be due to a lack of population growth in these areas.
• Kansas offered the biggest percentage increase in price after buying and remodelling a fixer-upper, with an average increase of 443%. However, the final average price was still lower than that of states like California, Texas, and New York.
• Idaho fixer-uppers also showed an interesting trend, with a 288% increase in price after tuning up, resulting in profits of nearly $700,000 on average.

So, why are fixer-upper homes more common in some states than others? There could be several factors at play:

• Lack of affordable turnkey homes: In states like California, Texas, and Florida, there is a high demand for housing and a limited supply of affordable turnkey homes. This drives buyers to consider fixer-uppers as an alternative option.
• Population growth: States like Florida and Texas have experienced a massive influx of residents, increasing the demand for housing. This can lead to a higher number of fixer-uppers being purchased and renovated to meet the housing needs of the growing population.
• Rural areas: Rural states like Mississippi and Oklahoma may have a higher prevalence of fixer-uppers due to a lack of population growth. Without the competition from a growing population, these areas may have more fixer-uppers sitting on the market.
• Housing market trends: The housing market varies across states, with some experiencing faster selling times and higher prices. This can influence the number of fixer-uppers available and the potential for profit after remodelling.

In conclusion, fixer-upper homes are more common in some states due to a combination of factors, including housing affordability, population growth, market trends, and rural versus urban dynamics. For buyers considering a fixer-upper, it's important to weigh the challenges and costs of renovations against the potential for savings and improved living spaces.

Fixer-uppers can be purchased at auction

Homes end up at auctions when their owners stop making mortgage payments, forcing their lender to foreclose on the property, or when their owners fail to pay their property taxes, leading to the county government seizing the home.

You can find online auctions by searching for “real estate auction” along with the county in which you want to buy. You can also search the U.S. Treasury Department’s list of auctions, the U.S. Department of Housing and Urban Development’s list of homes for sale, or sites such as Auction.com.

Additionally, each county in the United States conducts lender or bank foreclosure auctions, which are performed by county sheriffs or their deputies. These auctions are a result of banks and lenders suing delinquent property owners to demand the return of collateral. Small population counties may have foreclosure auctions every weekday, while large population counties may have multiple auctions in a day.

Fixer-uppers purchased at auction can offer significant discounts compared to turnkey homes. However, it is important to conduct thorough due diligence and be prepared for potential challenges and renovation costs.

Fixer-uppers can be profitable for flippers

Fixer-upper homes are typically priced significantly below market value, making them attractive opportunities for investors looking for affordable properties. They offer lower price points, but often come with major DIY and renovation challenges. However, with careful planning, budgeting, and consideration, buying a fixer-upper can be a profitable strategy for flippers. Here are some reasons why:

• Reduced competition: Fixer-uppers often face less competition from buyers, especially first-time investors and young families, who may view them as "too much work." This reduced competition can help you avoid bidding wars and purchase the property at a rate you feel comfortable with.
• Reduced purchase price: Fixer-uppers are usually priced below market value to compensate for the needed repairs and renovations. This lower purchase price can provide a good opportunity for investors to acquire properties at a lower cost.
• Older and larger dwellings: Some fixer-uppers are older homes with larger floor plans and block sizes. These properties may have sturdy bones and offer plenty of space to work with, allowing you to create the layout and design you desire.
• Customisation and improved property value: With a fixer-upper, you have a clean slate to create the space you want. You can customise the property to suit your needs and tastes, upgrading appliances, fixtures, and layout. These upgrades can potentially add significant value to the property, resulting in a higher resale price.
• Spread out repairs and improvements: With fixer-uppers, you are not required to complete all the repairs and improvements immediately after settlement. You can spread out these expenses over time, allowing you to work within your budget and plan your renovations effectively.

However, it is important to note that buying a fixer-upper also comes with potential drawbacks and challenges. Home repairs and renovations can be expensive and unpredictable, especially with older properties that may have hidden issues. Unexpected complications and additional costs can escalate your budget and reduce profitability. Therefore, it is crucial to have a thorough understanding of the property's condition and the potential costs involved before making a purchase decision.

Fixer-uppers are popular with buyers on a budget

Fixer-uppers are often popular in areas where there is a lack of affordable turnkey homes. For example, in California and Texas, where there is a shortage of affordable homes, fixer-upper posts on social media are very common. In these states, as well as in Florida, there are also a high number of fixer-upper listings.

However, it's important to note that buying a fixer-upper is a serious investment. While it can be a great way to get a property at a lower price, it often requires a lot of time and money to make the necessary repairs and renovations. Inexperienced buyers may underestimate the cost of these repairs, which can include expensive structural and service issues such as problems with the foundation or plumbing.

To make sure you're getting a good deal on a fixer-upper, it's important to do your research and due diligence. Get a home inspection to identify any potential issues, and estimate renovation costs to ensure you can comfortably afford the work. Remember, surprise costs can always pop up, so it's crucial to have a buffer in your budget.

Fixer-uppers can be a great option for buyers on a budget, but they require careful consideration and planning. If you're thinking of purchasing a fixer-upper, make sure to weigh the pros and cons and ensure it's the right decision for your unique situation.

Fixer-uppers can be more work than anticipated

Fixer-uppers can be a great option for those looking for a more affordable home or for those interested in flipping a house for profit. However, it is important to remember that fixer-uppers often require a lot of time and money to renovate. Structural and service issues, such as foundation or plumbing problems, may not be visible at first but can require expensive professional contracting work.

To avoid unpleasant surprises, it is crucial to get a home inspection before purchasing a fixer-upper. A qualified home inspector will provide a report outlining the necessary repairs, which can help with budgeting and project prioritization. It is also a good idea to estimate renovation costs by creating a list of projects and pricing out materials and labor.

Unexpected issues often arise during fixer-upper renovations, especially in older homes. It is important to be prepared for surprise costs and long-term construction projects. Unless you live elsewhere during the renovations, you will have to live in a construction zone until the work is completed.

Overall, while fixer-uppers can be a great opportunity, they can also be more work than anticipated. It is important to do your research and be prepared for the potential challenges and costs involved in renovating a fixer-upper.

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