Buyer Resource Center › The Home Search › Should You Buy a Fixer Upper?
A fixer upper can be a great way to get into a neighborhood you love, build equity faster, and make a home truly yours. It can also turn into a money pit if you go in without a plan. Before you fall for a house that needs work, here's an honest look at what it takes, especially if you're buying with a VA loan.
6 Questions to Ask Before You Buy a Fixer
Will the Home Pass the VA Appraisal?
A standard VA loan requires the home to meet the VA's minimum property requirements for safety, soundness, and sanitation. Cosmetic issues are fine, but problems like a failing roof, missing handrails, peeling paint on older homes, or a broken furnace usually have to be fixed before closing.
Is a Renovation Loan an Option?
Renovation loans let you finance the purchase and the repairs together. Some lenders offer VA renovation loans, and other options include FHA 203(k) and conventional renovation programs. Each has limits on what work is allowed and how the process works.
What Will the Work Really Cost?
Get contractor bids during your inspection period, not after closing. Then add a cushion for surprises, since older homes often hide problems behind the walls. Many buyers plan on 10 to 20 percent extra.
Do You Have the Time and Skills?
Be honest about how much work you can do yourself and how long you can live with dust, noise, and a torn up kitchen. Projects almost always take longer than planned.
What Permits Will You Need?
Many projects, from electrical and plumbing work to structural changes and additions, require permits in Portland and surrounding cities. Unpermitted work can create problems with insurance, appraisals, and resale.
Does the Math Work When You're Done?
Compare the purchase price plus repairs with what similar updated homes in the neighborhood sell for. If the finished home would be worth less than what you put in, it's probably not the right fixer.
The bottom line: The right fixer upper can build equity and give you a home that fits you perfectly. The wrong one can drain your savings. Know the VA appraisal limits, get real bids, budget for surprises, and make sure the finished numbers make sense. I'll help you tell the difference.
Frequently Asked Questions
Can I buy a fixer upper with a VA loan?
Yes, as long as the home meets VA minimum property requirements by closing. Cosmetic issues are fine. Safety or structural issues usually must be repaired before closing, or financed through a renovation loan.
What is a VA renovation loan?
It's a VA backed loan that lets you finance the purchase price plus the cost of certain repairs and improvements. Not every lender offers one, and there are limits on the type of work, so ask a VA lender about availability.
Who pays for repairs required by the VA appraisal?
It's negotiable. Often the seller makes the repairs before closing. Sometimes buyers and sellers agree on other arrangements, but the work must be completed and confirmed before the loan can close.
How much should I budget for a fixer upper?
Start with contractor bids, then add a cushion of 10 to 20 percent for surprises. Older homes often have hidden issues with wiring, plumbing, or moisture.
Do I need permits for renovations in Portland?
Many projects do, including most electrical, plumbing, structural, and addition work. Check with the city or county before you start, since unpermitted work can cause problems later.
Is a fixer upper a good investment?
It can be, if the purchase price plus repairs is comfortably below the value of similar updated homes nearby. A CMA on renovated homes in the area helps you decide.
Keep Reading
What to Ignore and What to Worry About on a Home Tour
Easy cosmetic fixes you can look past, and the real red flags that deserve a closer look.
Read more ›The Home Inspection Process
What an inspector checks, how to get the most from your inspection, and how VA appraisals differ.
Read more ›What's a CMA?
How a comparative market analysis helps you offer the right price.
Read more ›
Meet Your Veteran Realtor
Troy Doty, Principal Broker
Troy Doty is a Principal Broker with Northwest Realty Source in Portland, with 25 years in real estate and over 1,000 homes sold across the Portland metro and SW Washington. As a Marine Corps veteran, Troy has a true passion for helping Portland veterans and active duty military families buy and sell homes, whether you're PCSing in, transitioning out, buying your first home, investing in a duplex, triplex, or fourplex, or right sizing later in life.
Schedule a Call or Video Meeting ➜ More About Troy ➜ Free Veteran Buyer E-BookPrefer to call or email? 503.997.4169 · troy@nwrealtysource.com
Troy Doty, Principal Broker, Northwest Realty Source. Licensed in Oregon and Washington. ABR®, MRP, and SRES® are credentials of the National Association of REALTORS® and its affiliates. CIAS™ is a designation of U.S. Realty Training. Content adapted in part from ABR® consumer resources. This page is general information, not legal, tax, or lending advice.
