Better to buy a doer upper under budget or a house already done at max budget?

EssexHebridean

We had a similar dilemma to this when we were buying - the original house we saw and fell for was small-ish - still considerably larger than the flat we were moving from, but to get the house we wanted we were aware we’d need to do some knocking about and probably a small extension to the rear as well. In the end we had a delay on that as couldn’t sell our flat in the timescale, and that gave us valuable thinking time - in fact by the time we were in a position to think about re-offering we’d come to the conclusion that was simply more work than we wanted to live with, and ended up adding £50k to the budget and buying somewhere where the extension had already been done, and the interior was finished to a good standard. For us, it’s worth every penny, but where our situation differs from yours is that we weren’t stretching as much financially anyway - and we’d already cleared the mortgage on the flat which meant that the move could be done with a mortgage of half the size you are considering. 

Don’t underestimate how horrible living with building work can be - brick dust gets everywhere, it gets very old very fast having mess everywhere, and frankly, I’d sooner not be dealing with that sort of thing again! 😂

Gentoo365

It's not a binary choice.

I would be unlikely to ever want to buy a house that has been renovated. It would likely mean paying for lots of choices I wouldn't make. 

I would also not want to buy a property that was so 'in need of modernisation' that it was not livable in until significant work was done.

However I would be more than happy to buy a house where kitchens, bathrooms need replacing 'at some point', the house needs to be redecorated/painted 'bit by bit' and there is potential, when/if I decide to do it, to extend.

Basically I can than do any work (or pay for it to be done) as and when I want. 

Dontpanic86

Cloysterpete said:

Dontpanic86 said:

Once interest rates/ maintenance / fees / furniture etc etc are taken into account then it isn't really much of an 'investment' but I think the emotional aspect outweighs that. Check out ramit sethi and diary of a CEO on youtube re. house buying. We've got a good rental deal and the landlord does everything, we don't deal with any house things and he's fairly efficient to replace and fix but I think we are lucky in that respect! But not being able to paint or have own furniture is becoming a bit annoying

Renting works well for some, I would find it very stressful not knowing if my rent is going to be hiked again next year, although I guess you would also have that concern with mortgage rates. I was fortunate enough to move straight from my parents into my own place, mortgage free, I’d still be living at home with my folks if I had to rent I’ve never seen that as good value for money. 

Yeah I guess everyone's situation is different. It wouldn't work for me and partner to live with parents to avoid renting but financially, living with parents definitely better but it would drive me crazy!  Luckily we don't have big rent increases and the money we don't need to use for maintenance etc we invest so it's growing that way (up 17% this year) but I think most people don't invest so renting then spending money on other things is a waste!

Dontpanic86

GDB2222 said:

I think people generally underestimate the cost of doing up down at heel houses, and so they tend to overpay. 

If your dad is prepared to work for nothing doing the work for you, that obviously helps. But he could work for other people on a paid basis, and give you the money, so don’t overestimate that benefit. 

Yeah for sure, he's been to look at some places with us. As i'm not receiving any financial help from parents, dad did say he'd do work for free, more consultancy/ carpentry based and the heavy stuff we get others people in or do ourselves 

Albermarle

Due to the fact that building costs rocketed after Covid ( materials and labour) this is one argument for buying a house where any major work has already been done a few years ago, such as an extension or loft conversion.
Of course as already mentioned there are other pros and cons as well. 

SootySweep1

Hi
My issue with buying a house that is already done is "Is it done to your taste & a decent standard ?"
It may have a new kitchen / bathroom but do you like it ?
It's got new flooring / carpets but are they a decent quality ? Or are they new but poor quality & going to look naff in 6 months ?

However doing a property up does take time and money and it will always cost alot more than you think but you don't need to do it all at once.

SadieO

Gentoo365 said:

It's not a binary choice.

I would be unlikely to ever want to buy a house that has been renovated. It would likely mean paying for lots of choices I wouldn't make. 

I would also not want to buy a property that was so 'in need of modernisation' that it was not livable in until significant work was done.

However I would be more than happy to buy a house where kitchens, bathrooms need replacing 'at some point', the house needs to be redecorated/painted 'bit by bit' and there is potential, when/if I decide to do it, to extend.

Basically I can than do any work (or pay for it to be done) as and when I want. 

This was exactly our thinking when we bought our house two years ago. It was a former rental that was pretty shabby, and everything was pretty old (and was probably cheap crap even when it was new!) but it was functional and livable. We are enjoying gradually updating and upgrading things at our own pace, and at the moment we're actually taking a big step forward in that we're in the middle of having an extension added. One of the things we liked about the house was the potential to do this, so it's great that it's now coming to pass. 

The purchase price was at the lower end of our budget, and once we've paid for everything we want to do, we'll probably have spent the difference between this house and the top of our budget. However, even though we'll have ultimately spent around the same, this way it is being spent at our leisure and on things that we choose. Having rented for 20+ years before buying, we were sick of living with other people's choices! And if anything happens to change our finances or priorities, we could just put a hold on the further plans we've got for the future. If we'd bought a more expensive house with these things already done then we'd be stuck with the bigger mortgage. 

Arguably we get extra hassle doing it this way, as we have to sort out the work. But I enjoy doing the little things (painting etc) and as for the big stuff like building works, it's worth it for us to get something that is exactly what we want. 

Bigphil1474

I've seen that guy on YouTube, keeps popping up on my Facebook feed. Think he was interviewing someone who said something like buying is a waste of money when you can rent and invest the difference. They gave an example of rent being $3300 and a mortgage on a similar property being $6600. If that were the case, I'd be renting and investing the difference as well. Fortunately, it's usually cheaper to get a mortgage than it is to pay rent in the UK, so the whole argument is nonsense, and as mentioned earlier, mortgages end. We had 4 years mortgage free and it was a great feeling, we've since took on a small mortgage since moving house, but even that will be paid off before I retire.

Herzlos

It depends a lot on the house and what you want. Any job is going to take at least twice as long and cost twice as much as an estimate, so you need to be sure it'll be your dream house in a few years.

It also depends on how much you can live with it in the mean time. We bought a house we're fine with and will modernize gradually, with nothing that was really unlivable.

The house will also need to be habitable in order to qualify for a mortgage; so has a functional bathroom and kitchen, be water tight, etc.

saajan_12

Such decisions are subjective so I like to give things to think about for your specific situation rather than a firm answer. 

• Is the doer upper something you can deal with for some time and do up bit by bit, or would it be a major, urgent renovation leaving you in a building site? Also how much time would the renovation eat up, and could you littlerally get a side job to make up any monetary difference? 
• Is the renovated house to your taste, or are you paying top dollar for something you don't like anyway? Are you someone who cares about design choices being to your taste?
• Do you enjoy the project side of it or would it be a painful necessary to get through? As if you dislike it but think you can manage for say <6 months> then it'll most likely come out longer and you'll hate it in month 10 when its still going 
• How does the price difference compare with the cost of the works? As historically, the difference was higher as there was a value put on the hassle saved. However more recently ~since covid, building materials and labour costs to an extent have shot up. So houses that were renovated a few years ago might be priced lower than it would cost to do buy and do up somewhere.