As summer winds down and the fall season is on our doorstep, many homeowners might start to plan some inside projects they can start once the temperatures begin to cool down. There are plenty of home improvement shows these days that focus on everyday homeowners becoming their own “flippers” in fixing up an old, outdated or rundown home. Whether you find yourself interested in flipping a home to turn a profit or to live in on your own and hope to sell for more money down the road, be aware of the reality of flipping homes that most people aren’t aware of outside of the TV show side of things. Parry Custom Homes, a premier Pittsburgh on your lot builder, shares why you may want to think twice before purchasing a home to flip.
In a recent analysis by Zillow, it was found that across the U.S. the average home that was fixed-up or flipped sells for just eight percent less than market value. In dollar amounts, this means that it saves buyers about just $11,000 for renovations to break even.
Over the 70,000 homes being flipped across the U.S. that were a part of the study, it was found that if the renovation costs exceed the discount they got on the home, it might be less expensive for them to buy a similar home that doesn’t require the renovations.
Out of all the locations that were analyzed, Phoenix was the location with the smallest cash discount, saving buying’s only about $1,000 off list price. Hardly a bargain for all the time and money that goes into home renovations, with very little leeway.
The best place to find large upfront cash savings on fixer-upper homes is in expensive markets, where a small amount of discount could add up to a large sum of money to spend on renovations. For example, most fixer-uppers in San Francisco are discounted 10 perfect, which is lower than other metro areas but gives buyers just over $50,000 upfront that can be put towards renovations.
So, if you are considering a fixer-upper, be sure to do the math first as well as do your homework on how much renovations cost. Most kitchen renovations cost over $11,000, which is the average number of savings a buyer will get on a fixer-upper. If you need to update more than just a kitchen, you will most likely be better off buying a home that has little to no renovations needed.
In the end, you will always have your favorite home improvement and fixer-upper TV shows to enjoy, even if you don’t take on a similar project yourself! It might just save you lots of money keeping your renovation desires strictly to your TV programs.
Parry Custom Homes is an established homebuilder in the Pittsburgh area. Call or contact us today for more information.