Before you take on a renovation project, it’s worth understanding the different types of value-add properties. Each type comes with its own level of commitment, cost and risk, so identifying the category upfront can help set realistic expectations.
THE UPSIDE OF BUYING A FIXER UPPER
Lower price
Properties in need of repair or modernisation often sit at the lower end of the market, giving buyers the chance to enter more sought-after suburbs that may otherwise be unaffordable, especially in areas with rising property values.
A blank canvas
Unlike brand-new homes or renovated properties, a fixer-upper offers the opportunity to truly make the space your own.
Growth potential
If you buy well and renovate wisely, your efforts can pay off significantly. Strategic improvements can boost a property’s value, offering strong capital growth. For those looking to build wealth through real estate, it can be a smart long-term play.
THE CHALLENGES YOU MIGHT FACE
Unforeseen costs
The initial price may be appealing, but home renovations often come with a long list of hidden costs. Consulting with a builder or architect early on can help you avoid expensive surprises.
Time, energy and stress
Fixer-uppers often require a significant time commitment and come with a fair amount of stress. Sourcing trades, managing timelines or dealing with unexpected delays are realistic factors.
Financing can be complicated
Some lenders are cautious about funding homes that require major work, especially if the property isn’t liveable in its current state. You might need to explore construction loans or have a detailed renovation plan ready to secure finance. Speak to a mortgage broker early on to see where you stand.
IS A FIXER-UPPER RIGHT FOR YOU?
Here are a few questions to ask yourself before committing:
What’s your renovation experience?
If you’re handy or have connections in the building trade, you’ll have a head start.
Do you understand council requirements?
Always check with your local council before planning structural changes or additions. Zoning, heritage restrictions or bushfire overlays can all impact what’s allowed.
How much time can you realistically commit?
Renovations often take longer than expected, especially if you’re juggling a job or family.
What’s your budget?
Be honest and allow a buffer for unexpected issues, time delays or hidden costs.
Are you buying for lifestyle or investment?
Knowing your goal will shape your approach to budget and design decisions.
Buying a fixer upper can be incredibly rewarding. It’s a chance to breathe new life into a tired space, add value and express your personal style. For some, it’s a foothold into otherwise unaffordable suburbs. For others, it’s a passion project with long-term financial gain. Do your due diligence, talk to the right professionals and plan ahead, because the right fixer-upper, can deliver lasting value well beyond the initial cost.
