Buy A Turnkey Property or Fixer-Upper Luxury Home?
Benefits of Fixer-Uppers:
- Cheaper taxes
- Potential for flip equity
- Customization and creativity opportunities
- Tax breaks for rehabilitation
- Equity can be built while improving the value
Disadvantages of Fixer-Uppers:
- Renovation costs, effort, and permits
- Time-consuming and stressful renovations
- Navigating permits and inspectors
- Labor and material costs at an all-time high
- Hiring contractors can take months
- Shortage of qualified tradespeople and raw materials due to COVID
- Managing contractors and living in an unfinished home
Benefits of Turnkey Homes:
- No renovation costs
- Minimal effort required
- No additional costs for upgrades
- Lower property tax rates for cheaper fixer-uppers
- Higher upfront taxes for turnkey homes
- Little to no equity to spare
- Little to no customization and changes
Disadvantages of Turnkey Homes:
- No flip potential
- Limited opportunities for creativity or customization
- May not have all desired features or amenities
- Requires paying top dollar
Other Information:
- 52% of homebuyers prefer a starter home or fixer-upper
- Fixer-uppers can be sold for less than market value
- Turnkey properties are at a premium and offer little to no equity