The Age Old Question: Turnkey Vs. Fixer Upper

If you are renting or looking for your first home, there are always rough diamonds. However, some anxious owners cannot wait to leave their old dirty apartment and ask for a comfortable place to call home.

As such, many will face the big dilemma of buying a house that is ready to move or a house of repairs (fixer upper). Undoubtedly, there are pros and cons of each and the final decision will largely depend on your particular situation. After seeing both corners, you can feel confident in making the right decision for your dream home!

Fixer Upper Pros

Discounted prices

Undoubtedly, one of the biggest advantages when buying a fixer-upper is the price. Trust workshops give homeowners who are eager to own their property, even if they cannot afford the prefabricated houses that many of us really want.

Homes that need work almost always have an agreed price, because the landlord knows that the house needs work before it can sell or occupy it. Therefore, the selling price is usually lower than the potential market value. Therefore, for those who want to move within a few years, it makes sense to buy a fixer-upper of the highest quality.

Tax savings

The property taxes are based on the sale price of the house. Therefore, the bi-annual property taxes will be lower if you purchase a fixer-upper as compared to a new house. In addition, some repair providers, according to American Financial Resources Inc., also allow homeowners to apply for an investment tax credit for eligible rehabilitation costs. This is generally true for historic homes listed in the National Register of Historic Places.

Design Options

Another basic advantage of buying a fixer house is beside the money a blank canvas. If you decide that you are spending money to repair it, you have the freedom to design the house as you wish. If you want an open concept, you can do it. If you want to go fat in the kitchen, you can do it too.

Fixer-Upper Cons

Extra work

There is no doubt that fixer-upper needs more work than relocated houses. Not only do you need to find local contractors and work with them during the refurbishment process, but to save money, many impatient owners have got their hands dirty. Removing an old bathroom, painting a room, or destroying a room or the whole house may be a daunting task, but many find it challenging. In any case, get ready to get your hands dirty.

More time

Moving houses cost more because they are just that. Once you’ve unpacked your hundreds of boxes, your house is ready. The same cannot be said for a fixer-upper. Often, the conversion can take months to complete the house. This is especially problematic for those who work with an expired lease. We also know how exciting it is to move to a new home. Unfortunately, this emotion needs to fade away when you purchase a fixer-upper.

Benefits of turnkey house

New elements of design and technology

There are some design elements that seem to come with every new or renovated house. In contrast to a fixer-upper, new houses are equipped with design elements of the current lifestyle. These features include open floor plans, walk-in closets, barn doors, and wooden floors, just to name a few.

Easier financing

As mentioned above, you can get financing for a fixer-upper, but it might be easier to get a mortgage loan ready for a turnkey home. Your chances, of course, depend on your credit history, your down payment, your housing income and more, but it will be easier to get a 30-year fixed mortgage.

Efficient energy

Newer homes tend to be more energy efficient. A low energy house will not only keep you warmer in the winter and cooler in the summer, but you will also save thousands of dollars in utility bills for the entire life of the home.

Drawbacks of turnkey house

Expensive

Turnkey houses are almost always more expensive than a fixer-upper. If they were not, no one would buy a fixer house. So, if you want to buy a house ready for relocation, you expect to pay more than you would for a fixer-upper.

Architectural details

The newer houses rarely offer the unique architectural details that present older homes. While this may not be a problem for some, others love these different details outside the home. Keep in mind that few owners, when they change, change the appearance of their home (except for gardens, pools, etc).

Conclusion

There are dream houses around the world. Some see it as Victorian, while others see it as a new construction. As you have already seen, there are definitely many pros and cons when you purchase a fixer-upper or a turnkey house. With whom you go is your decision!

The Best Place To Buy Real Estate In The US

After another year of rising house prices and inventory depletion across the country, finding a place where you can put your money (and your mind) with reasonable return expectations have become increasingly difficult. Your investment Sweet points, however, are still widespread throughout the country. These cities offer a rare combination of above-average employment growth and some clues before housing becomes expensive, which anyone looking for a smart real estate investment should seek.

To find out where to look for a home this year, Forbes used the Local Market Monitor, which tracks over 300 real estate markets. For the CEO of each market, Ingo Winzer (Forbes partner) analyzed the life indicators and the biggest growth trends to reach 20 markets where he can park his money in 2018 and still sleep peacefully.

“Growing markets are always interesting,” says Winzer. “In a few years, however, today’s growth markets may be too expensive, the markets with average growth could also be a better bet for investors, as there is less competition for the real estate of choice and can buy them at a lower price.”

Trends

Orlando overcomes: The land of Mickey and Harry Potter World comes first this year. Orlando house prices rose 9% in 2017, reaching an average of $247,550. However, Local Market Monitor still rates the market as evaluated and expected prices will increase by 35% at the beginning of 2021. This optimism is largely due to Orlando’s 7.1% employment growth in the last two years, population growth of 7.6% as compared to the last three years. In general, Orlando is good when the United States is generally doing well as its economy is largely dependent on tourism. Nor does it hurt that house prices in Orlando, which are still affected by the housing collapse, are 22% lower than the national average. “Orlando has recovered in the sense that employment growth has been strong and home prices have risen at a healthy pace along with income,” notes Winzer. “Property prices are still below the top of the bubble, so they have not recovered in the narrower sense.”

Tech Threat: At the other end of the spectrum, there are several cities on the West Coast and in Texas, where high demand for high-income technologies and workers in the energy sector has pushed prices to the limit of accessibility. Until recently, some of these cities seemed to be safe bets, but dizzying price growth in 2017 increased the risk. Austin, Texas, for example, is ranked number 7 on our 2016 list. After a rise of 7% in 2017 to an average of $305,000, real estate prices are now 30% higher than the price/income of the city has historically supported. In Seattle, No 4 in 2017, prices are 25% higher than those historically valid. Seattle prices rose 14% last year, more than any other major city in the United States, and already more than half of the growth that winegrowers predicted between 2017 and 2020.

Methodology

To put this list together, Winzer started with 330 markets. First, he eliminated those who were too small (populations below 500,000) and discarded those that behaved worse than key metrics. Finally, the 20 markets that achieved the best results in five measures were analyzed: one-year employment growth, three-year population growth (2014-2017), a one-year housing price growth, accessibility and three-year local market monitoring of price forecasts. We use labour force growth to rate the list this year. “In times of rising prices, a good economy is a better long-term investment criterion” than price growth, says Winzer.

To judge accessibility, Winzer uses a measure of the price of the house in terms of the price of rent, which is the price of the House of Equilibrium. This is the current average price of apartments in a market compared to the price if the historical relationship between house prices and income for that market were maintained. For example, in Columbus, Ohio, the average costs of housing is $229,776, or about 4.65 times the local per capita income. Historically, homes in Columbus have sold local incomes for 5.38 times. The gap between the two suggests that houses in the city have a low price of 13%.

Winzer believes that a deviation of 15% to -15% of the historical income price is normal. In general, a market is considered too expensive if this measure is 30% higher than the income price. While the low price is positive for people buying in a city where the economy is growing, it can be a big disadvantage in places without growth on the horizon. This is, for example, why Chicago is not on our list. Yes, housing prices are under-appreciated by around 20%, but employment growth is well below the national average. “There are many opportunities in Chicago, but unless the economy improves, you run the risk of not finding tenants,” says Winzer.