A “fixer upper” is typically the term that is used to refer to a house this able to be purchased at a lower price because it likely requires a lot of work to rehabilitate. The level of attention that these homes need may vary significantly. Some fixer uppers can be lived in while the upgrades are being completed while others require remaining vacant in order to complete the remodeling process. As expected, the market for these homes in such disrepair is a lot less competitive for buyers as compared to homes that have already been remodeled.
Recently, StorageCafe conducted a study that analyzed 61,200 active single-family listings as the nation’s housing market is slightly cooling. In addition, we are seeing home buyers backing out of purchases at the highest rate since the start of the COVID-19 pandemic. According to this analysis, two Florida cities were mentioned in their top 10 as best locations to find these fixer uppers.
Top 10 cities for fixer-uppers
- #1. Milwaukee
- #2. Philadelphia
- #3. Detroit
- #4. Memphis, Tennessee
- #5. Baltimore
- #6. Jacksonville, Florida
- #7. Dallas
- #8. Louisville, Kentucky
- #9. Miami
- #10. Fresno, California
What can you expect to spend for a fixer upper?
According to Porch, a home-improvement site connecting homeowners and contractors, the median cost of a fixer-upper home in the U.S. is around $225,000. For perspective, this is about 45% cheaper than turnkey homes in cities that are the same size. Interestingly, the price for a fixer upper home is about 24% lower than last year’s estimated price of $280,000.
As for the typical cost to renovate a home, this will vary greatly based on the size of the home and materials used. According to HomeAdvisor.com, home renovations and remodels average $47,803, with many projects ranging between $17,903 and $78,003. With this said, it is important to remember that many materials may be scarce due to persistent supply-chain issues. In addition, labor shortages in many markets can also provide a significant headwind.
Summary
As always, it is extremely important to have a local and knowledgeable real estate agent prior to embarking on an investment in a fixer-upper property. With record-high inflation causing prices of materials to skyrocket across all categories, it becomes even more challenging to accurately determine an investment’s potential. At Live South Florida Realty, Inc. we have assisted many real estate investors throughout the South Florida market. If you are considering a fixer-upper in South Florida, contact Natasha at Live South Florida Realty, Inc. today! Also, don’t forget to download our free Florida Home Search App!
