For many Gen Zers, the dream of homeownership seems out of reach due to the lack of affordable starter homes. About 1 in 5 Gen Zers, or 22%, express concerns about the affordability of entering the housing market. However, some believe that fixer-upper homes could be the solution to this issue. A fixer-upper, by Redfin’s definition, is an existing house that requires varying degrees of maintenance work and is typically priced lower than move-in ready homes.
While more than half, 57%, of Gen Z adults expressed willingness to purchase a fixer-upper, there seems to be a trend of regret among those who have already gone this route. Of the 40% of Gen Z homeowners who did buy a fixer-upper, about 27% regret their decision, highlighting the challenges that can come with such properties. The lack of awareness about the true costs of homeownership and renovation expenses could leave first-time buyers feeling overwhelmed.
Despite the potential drawbacks, buying a fixer-upper home can offer significant savings in the short term, especially when compared to move-in ready homes. According to a report by StorageCafe, the median cost of a fixer-upper house is approximately $283,000, which is about 29% lower than a move-in ready home. This price difference translates to savings of around $117,000 for buyers, making fixer-upper homes an attractive option for budget-conscious individuals.
Some Gen Z homebuyers are willing to take on fixer-uppers with significant disrepairs or outdated features that pose a great risk. For instance, over half, 56%, of Gen Zers in a survey expressed willingness to buy a home with asbestos, a harmful mineral fiber. When considering fixer-upper homes, it is crucial to ensure that the property is safe and livable to avoid any health and safety issues. Issues like toxins, asbestos, and other hazardous materials should be thoroughly inspected before making a purchase.
If you are thinking about purchasing a fixer-upper, it is essential to ask detailed questions about the property to the seller or real estate agent. Understanding the condition of the home and its potential renovation needs is crucial. Here are five key aspects to pay attention to when considering a fixer-upper home:
1. Roof: Check for any signs of a leaky roof and assess the potential cost of repairs. Roof upgrades can be significant, and water damage from leaks can lead to additional problems inside the home.
2. Plumbing: Inspect the condition of the home’s pipes and plumbing system. Older pipes may be more prone to breaking and causing water damage if they have not been upgraded.
3. Electricity: Determine the state of the home’s electrical wiring and when it was last updated. Ensure that the electrical system is safe and able to handle the home’s power needs.
4. Walls and Stairs: Look for cracks in the walls and ceilings, uneven floors, and issues with opening and closing doors. Additionally, check the safety of any stairs in the home.
5. Overall Land: Evaluate the land where the house is located and look for any potential problems like flooding or structural issues related to the surrounding environment.
Fixer-upper homes can offer an affordable entry point into the housing market for Gen Z buyers. While there are risks and challenges associated with renovating these properties, the cost savings and potential for customization make them an attractive option for budget-conscious individuals. By carefully considering the condition of the home and undertaking thorough inspections, buyers can make informed decisions about purchasing a fixer-upper and turning it into their dream home.