Pros and Cons of Buying an Old Fixer Upper vs. Building a New Home
- Gonzalo Trenosky
- Jan 8
- 4 min read
Happy New Year’s folks! I wanted to kick off the new year by talking about this topic, and a decision that some of you may face when it comes to deciding on your new home. Should I buy a used fixer upper, fix it up and build equity or build a new home from scratch and have all the luxuries you wanted in your new home. This topic is close to my heart at the moment since I am currently in the process of building a new home. I’ve also bought several fixer uppers in the past so I am well aware of what goes into that process as well. Both have pros and cons and neither option is correct or incorrect, it all depends on your specific situation and level of risk. Let’s dive into it.
When it comes to choosing a place to call home, potential homeowners often face a crucial decision: should they buy an old fixer-upper or build a new home from scratch? Each option has its unique advantages and challenges. In this blog, we’ll explore the pros and cons of both choices to help you make a more informed decision.
Pros of Buying an Old Fixer Upper
Affordability: Typically, old fixer-uppers come at a lower purchase price compared to new homes. This can allow buyers to invest in renovations while still staying within their budget.
Character and Charm: Older homes often feature unique architectural styles, historical details, and charm that newer builds may lack. These elements can create a warm, inviting atmosphere that is hard to replicate in modern designs.
Established Neighborhoods: Fixer-uppers are usually found in established neighborhoods with mature trees, developed amenities, and a sense of community. This can be appealing for families and those looking for a friendly environment.
Potential for Appreciation: Investing in a fixer-upper can lead to significant equity gains when renovations are completed. A well-renovated home can appreciate in value, providing a good return on investment.
Cons of Buying an Old Fixer Upper
Renovation Costs: While the initial purchase may be cheaper, the cost of renovations can add up quickly. Outdated systems or hidden damage can lead to unexpected expenses that you did not budget for therefore resulting in more money out of pocket.
Time and Effort: Renovating an older home requires significant time and effort. This includes managing contractors, timelines, and possibly living in a construction zone during the process. I’ve renovated multiple homes I’ve lived in and I can tell you the wife was not happy during that process. It’s a huge disturbance and not for the faint at heart.
Building Codes and Regulations: Older homes may not meet current building codes, requiring upgrades to comply with safety standards. This can add to the renovation costs and complexity of the project.
Maintenance Issues: Older homes may come with a variety of maintenance challenges, such as outdated plumbing, electrical systems, and roofing. Homeowners should be prepared for ongoing maintenance.
Construction Disturbance: Perfect segway from what I mentioned above. These renovation projects can lead to significant disturbances in daily life. Noise, dust, and limited access to certain areas of the home can be challenging and disruptive, impacting quality of life during the renovation period.
Pros of Building a New Home
Customization: Building a new home allows for complete customization according to personal preferences and lifestyle needs. Homeowners can choose layouts, finishes, and eco-friendly options that suit their tastes.
Modern Energy Efficiency: New homes are designed with energy efficiency in mind, using the latest materials and technologies to reduce utility costs and environmental impact.
Reduced Maintenance: A new home typically comes with a warranty covering major systems and appliances for several years, resulting in lower immediate maintenance concerns.
Future-Proofing: New builds can incorporate the latest technology and design trends, making them more adaptable for the future and possibly more desirable for resale.
No Construction Disturbance: Building a new home from the ground up allows homeowners to avoid the disruptions associated with renovations. Once construction is complete, the home is ready for immediate enjoyment without the ongoing noise and mess of renovation projects.
Typically Lower Cost to Insure: Since the home is built to code and incorporates the latest materials and warranties associated with them insurance companies tend to have lower premiums for new construction. Older homes come with some unknowns when it comes to the type of materials used and if everything was installed to code at the time of construction.
Cons of Building a New Home
Higher Initial Costs: The cost of purchasing land and constructing a new home can be significantly higher than buying a fixer-upper. Potential buyers should have a robust budget in mind.
Longer Timeline: Building a new home is a lengthy process that can take several months to over a year, depending on the project size and complexity.
Location Limitations: Suitable land for building may be limited, particularly in desirable areas. This can lead to compromises regarding the location or local amenities.
Building Codes and Regulations: While this can also be a pro, navigating the local zoning laws, permits, and inspections can be overwhelming and time-consuming for first-time builders.
Strict Zoning Requirements and Impact Fees: New construction often faces strict zoning regulations, which can limit design, height, and usage. Additionally, municipalities may impose impact fees on new builds to help fund public infrastructure and services, adding to the overall cost. Make sure to read the nuances on impact fees for your specific location and be aware that it may be a significant cost.
Conclusion
Ultimately, the decision to buy an old fixer-upper or build a new home comes down to individual preferences, financial situations, and long-term goals. Buyers who value character, community, and potentially lower purchase costs may lean towards fixer-uppers, while those looking for modern convenience, customization, and fewer immediate maintenance issues may prefer building new. By weighing the pros and cons of each option, including the impact of construction disturbance and zoning requirements, you can make a more informed choice that aligns with your vision for the perfect home.
