Buying a Fixer-Upper: Pros, Cons, and Steps to Take

You’ve always dreamed of buying a fixer-upper home. A fixer-upper typically has a lower price tag, potential long-term value, and a chance to customize your space. However, these homes also come with risks like construction delays and high contracting costs. 

Before you take the leap from your Redmond apartment, Eugene rental house, or home in Helena, take a look at these pros, cons, and tips to help you decide if buying a fixer-upper is the right move for you. 

In this article: 

• What is a fixer-upper house?
• How to find fixer-upper homes
• What to look for when buying a fixer-upper
• How to buy a fixer-upper in 7 steps
• Financing options for fixer-uppers
• FAQs

What is a fixer-upper house?

A fixer-upper is a home in need of repairs, ranging from cosmetic updates to more significant renovations. While many are still livable, they often require more work than the average home. Here’s a look at the pros and cons of buying a fixer-upper: 

Pros to buying a fixer-upper

• Lower purchase prices: Fixer-uppers are usually listed at a lower price than move-in ready homes because they often require repairs. This can mean a smaller down payment, freeing up some cash to put toward renovations. 
• Customization: An outdated kitchen doesn’t have to be a deal breaker. You have the ability to update and design the home exactly how you want. 
• Potential for equity growth: Renovating a fixer-upper can boost home value over time. Buying at a low price, making smart updates, and selling at the right time can result in a profitable investment.   
• Less buyer competition: Fixer-uppers don’t have as many interested buyers, so you won’t need to worry as much about competition when making an offer on one. 

Cons to buying a fixer-upper

• Unexpected costs: Even if you’re planning a major renovation, hidden issues like structural problems, outdated systems, mold damage, or pest infestations can lead to costly, unplanned repairs. 
• Time commitment: Renovating a fixer-upper can be incredibly time consuming. Depending on the state of the house, you may need to prioritize projects just to make it livable. 
• Specialized skill requirements: If you don’t have the skills (or the time) to do the renovations yourself, hiring contractors adds to the overall cost and can potentially offset the savings from buying your fixer-upper. 
• Increased stress: Living through renovations can be uncomfortable and chaotic. The disruption, dust, and ongoing to-do list can quickly become overwhelming.
• Financing: Loans for fixer-uppers can get a little more complicated than an average home loan. Some options bundle the cost of the home and the anticipated renovations, while others cover the renovations alone. Talk with a lender to determine which one is right for you. 

How to find fixer-upper homes

You can find fixer-uppers the same way you’d find regular homes for sale online. Most sites, like Redfin, allow you to filter by home features and select “fixer-upper.” A local real estate agent can also help you find homes that meet your criteria. 

Real estate auctions are another way to find fixer-upper homes for sale. However, you’ll have to buy the home as-is at auction, so be aware that there may be hidden problems. 

You can also look at foreclosures and short-sale properties as they’re often sold below market value. 

What to look for when buying a fixer-upper

Search for a fixer-upper house that fits your home search criteria and balances your time, ability, and budget for renovations and repairs. Even though you’re planning on fixing things up, you’ll still need to do your due diligence to be sure a house is the right fit for your situation. 

House location

Location is key in the home buying process. Look for a fixer-upper in an established neighborhood that’s close to amenities, like stores, entertainment, and restaurants. Consider if the area has a good Walk Score or public transportation options. 

You’ll also want to consider other homes in the area when choosing how and what to upgrade in the home. When the time comes to sell the property, you want to make sure that your home is comparable with homes nearby, and that any updates you make add value.

Size and layout

Consider whether the size and layout of the home meets your space needs. You can renovate a home’s layout, but choosing one that already works makes doing other updates and repairs easier. 

If the property has small rooms or a closed floor plan, removing walls to open up the space costs between $1,000 to $10,000 on average. Load-bearing walls and more complex materials can cost even more. 

Overall condition

The best fixer-uppers are the homes that don’t require extensive structural repairs. Cosmetic repairs like the examples below are easier to manage and don’t usually require a permit:

• Fresh interior and exterior paint
• New carpets and flooring
• Resurfacing kitchen cabinets and replacing hardware
• Upgrading appliances
• Cleaning up the landscaping
• Removing outdated fixtures

Altering utility systems, moving walls, replacing windows, and adding or removing portions of the home are more expensive, labor-intensive tasks. Most also require permits, inspections, and contractors. Buying a fixer-upper in good structural condition will ensure the savings you scored upfront don’t disappear too quickly. 

Inspection insights

Carefully consider the results of any inspections you get on the house. Determine whether the cost of repairs is worth the initial investment of buying the house and fits into your renovation budget. If the inspections reveal serious structural damage, extensive mold growth, or significant pest damage, it might be time to walk away. 

Appreciation potential

It’s essential to evaluate the above factors when considering the appreciation potential for a fixer-upper. Look for properties in growing areas that you can renovate strategically to optimize resale value in the right market. 

Whether you’re trying to flip a house for a profit or just want to make a smart investment for the future, analyzing each aspect will help you understand the appreciation potential. 

How to buy a fixer-upper in 7 steps

1. Determine a budget including renovations

Figure out how much home you can afford, and factor in your renovation budget. Research common renovation costs, determine your available funds, and factor in a financial cushion for unexpected expenses.

Some types of fixer-upper loans allow you to combine the home’s price and renovation costs into one mortgage.

>>A Redfin example: 5×7 Bathroom Remodel Cost Breakdown for 2025

2. Search for the right fixer-upper

Use Redfin’s home search filters to select “fixer-upper” under home features to pull up options in your desired area. As mentioned above, you can also look at real estate auctions, foreclosures, and short-sale properties. A good real estate agent can also help you search for fixer-uppers that meet your specific requirements and budget. 

>>Read more: How to Choose the Right Real Estate Agent in 10 Steps

3. Have a thorough home inspection

A home inspection is crucial when buying any home, but it’s particularly important when buying a fixer-upper. Even if you’re already planning major renovations, a qualified home inspector will thoroughly look through the entire home and identify any issues that need to be addressed. Pay close attention to electrical systems, roofing, foundation, and HVAC systems. Consider these additional inspections for specific concerns:

• Lead based paint inspection
• Sewer scope inspection
• Pest or termite inspection
• Mold inspection

>>Read more: Buying a House with Mold: Important Considerations for Buyers

4. Consult a contractor

DIY-ing some home renovations can save you a ton of money, but consulting a contractor at the very least can be a big help. They will be able to tell you which renovations are possible based on home structure, which projects will add value to the home, and which specific ones may require permits. If you do plan on using a contractor, consulting with multiple will help you determine the right one to lead your projects. 

5. Explore fixer-upper financing 

There are several types of loans that can help you buy a fixer-upper and cover renovations. Consult with your mortgage lender to learn about what specific loans they offer, and check out our breakdown of the most common ones below. 

6. Understand potential resale value

While many buyers hope to flip a fixer-upper for profit, resale value depends on more than just renovations. Location, comparable home prices, and market trends all play a major role. It’s also important to renovate appropriately for the neighborhood—over-improving in a lower-priced area, or cutting corners in a high-end one, can hurt your return on investment.

7. Make a smart offer

When you’re ready to make an offer on a fixer-upper, be sure to negotiate a good balance between the listing price and the cost of repairs. A home needing significant repairs can give you good leverage to negotiate a lower price with the seller. 

While you can still make an offer without a real estate agent, having an experienced agent help you with negotiations makes for an easier process and peace of mind on your end. 

Financing options for buying a fixer-upper

Here is a brief comparison of four common loan options to use when buying a fixer-upper:

Fixer-upper FAQs

How much does it cost to fix a fixer-upper?

The price of fixing a fixer-upper varies widely depending on the extent of the repairs needed. On average, you can expect to spend at least 10% of the home’s value on major renovations, or more if extensive repairs are needed. Carefully analyze the expected costs of renovations, materials and labor, and hidden issues against the price of the home and your personal budget before buying a fixer-upper. 

Is buying a fixer-upper worth it? 

Buying a fixer-upper can be worth it for the upfront cost savings and customization options, especially for those who love a project. But it’s important to weigh the risks and downsides like time commitment and expensive repairs to determine what is best for you. 

Are fixer-upper homes good investments? 

Fixer-uppers are generally sold at lower prices due to the needed repairs. With the right renovations and keeping an eye on the housing market for the best times to sell, a fixer-upper can turn a nice profit.  

Can I get a mortgage on a fixer-upper? 

Yes, you can get a mortgage on a fixer-upper home. Some finance options combine the cost of the home with the cost of renovations. Consult with your lender to determine what the right path is for a specific home and your financial situation. Depending on the state of the house, some lenders may require certain finance options.

Can I buy a fixer-upper as a first home? 

Since they are sold at lower prices than ready-to-live homes, a fixer-upper can be a good option as a first time home buyer to break into homeownership. However, it becomes even more important to plan carefully and be flexible. Home ownership already comes with its own list of risks, maintenance, and financial awareness, so be prepared for that list to grow if a fixer-upper is your introduction to it. 

At what point is a house not worth fixing? 

If the cost of repairs outweighs the potential increase in home value, it might be time to walk away. Be aware of fixer-uppers with extensive structural, pest, or mold damage. These can be extremely costly to remedy and may offset the perceived savings on the overall cost of buying the home.

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