Things to Consider Before Investing in a Fixer-Upper Home

Things to Consider Before Investing in a Fixer-Upper Home

There are a variety of reasons for which people invest in fixer-upper homes.

There are a variety of reasons for which people invest in fixer-upper homes. Some investors seek to turn these properties into personal residences, while others wish to “flip” them and sell them for a higher price. In light of the exorbitantly high home prices found in popular parts of the country, there’s little wonder as to why fixer-uppers are currently in such high demand. Whether you’re looking for a place to live or simply wish to make some extra cash, fixer-uppers represent an affordable alternative to traditional homes.

When perusing the local real estate market for prospective flips, it’s important to remember that not all fixer-uppers are equally sound investments. While many of these properties can be successfully renovated for reasonable sums of money, some of them aren’t worth putting your financial resources behind. Fortunately, taking the following factors into account before purchasing a fixer-upper can ensure that you don’t get stuck with a lemon. This ultimately stands to save investors a considerable amount of time, money and hassle.

Foundational Issues

The adage “You have to spend money to make money” certainly holds sway with experienced property flippers. However, when it comes to the amount of money you’re willing to spend on a single property, there needs to be a limit. Case in point: If a home you’re interested in flipping has fallen prey to serious foundational issues, it may be a good idea to pass. Depending on the size of the property and the area in which it’s based, major foundational repairs can cost upward of $100,000. Recouping your investment on a home with a faulty foundation isn’t impossible, but it’s not exactly something you should count on, either.


Location is another factor that should be carefully considered before investing in a property. Suffice it to say, homes located in areas with highly-rated schools and steady market growth tend to command higher prices than properties based in areas plagued by high crime, poor economic growth and low-performing schools. This isn’t to say that you should avoid fixer-uppers located outside of affluent areas. Rather, you should weigh the initial purchase and repair costs against the potential profit. Properties in less desirable areas typically sell for less than homes in popular neighborhoods, so remember to consider this when calculating how much money should be spent fixing up a house in an unpopular part of your city or township. DFW Sell Fast, a company that specializes in investment properties in Dallas, can help flippers in the Dallas-Fort Worth metroplex hammer out comprehensive cost/benefit analyses.


An informed buyer is a happy buyer – particularly in matters concerning real estate. While it’s true that investment properties are less expensive than traditional homes, they don’t exactly come cheap. Even before renovations begin, odds are you’ll be spending at least tens of thousands of dollars on any given fixer-upper. After factoring in repairs, you can expect to spend quite a bit more. That being the case, it’s strongly recommended that you know exactly what you’re getting into before sinking a substantial sum of money into an investment property. Luckily, an experienced building inspector can provide you with answers you seek in a timely manner. This person will bring any structural, foundational or wiring issues to your attention, thus providing you with the information you need to make an informed decision.

Many investors consistently make handsome profits from flipped properties. However, before pouring money into a fixer-upper, it’s important to know what you’re in for. In the interest of avoiding large-scale buyer’s remorse and protecting your personal finances, keep an eye out for foundational issues, carefully consider each property’s location and have all potential flips thoroughly inspected.

About the Author: Phillip Townsend is a career home flipper based out of the Dallas-Fort Worth metroplex. He attributes joining DFW SellFast’s network of investors to the vast majority of his recent successes.