Survey: HVAC, plumbing most likely to send renovation budgets over the limit
A majority of people who bought a home in need of repairs said they were hoping to save money, and more than half said the needed work came in on budget. However, the cost of these renovations often made the home about as expensive as a move-in ready property.
The home improvement site Porch.com recently surveyed 1,069 homeowners to explore the differences between fixer-uppers and turn-key homes. Sixty-five percent of respondents said they had purchased a home that was move-in ready, while 35 percent said they bought a fixer-upper.
Fifty-two percent of those who bought a fixer-upper said the repairs were completed on budget, but 44 percent said the costs exceeded what they hoped to spend. Just 5 percent said they finished the work under budget.
A new HVAC installation was most likely to break the bank, with 54 percent saying this work went over budget. Fifty-two percent said they spent more than expected on plumbing or basement work, while 51 percent exceeded their budget on bathroom renovations or new appliances. Homeowners who went over budget spent an average of 38 percent more than anticipated.
Sixty-three percent of millennials in the survey said they bought a fixer-upper because they thought they could save money on the purchase price. Sixty-one percent of Generation Xers and 59 percent of baby boomers bought a fixer-upper for the same reason. This was the top reason among all generations.
Millennials were more likely than other generations to buy a fixer-upper because they liked the neighborhood or wanted to personalize the home. Gen Xers were slightly more likely than other generations to be attracted to these types of homes because of their charm or because they couldn't afford a nicer home in the area. Baby boomers were the most likely generation to say they liked the architectural style of the home, got a bigger property for the money, appreciated the landscaping, or thought they would enjoy working on the home.
Most homeowners who opted for a turn-key home appreciated the property's qualities more than the fact that it did not require renovations. Sixty-three percent said they bought the property because they liked the home, while 54 percent said they liked the neighborhood. Just 43 percent said they purchased a move-in ready property because they considered renovations and repairs to be inconvenient, while 35 percent said they had no time for this work and 28 percent said they did not have the money for it.
The vast majority of those who bought a fixer-upper knew they would have to complete repairs on the home. However, 6 percent said they did not know this work would be necessary.
On average, buyers who purchased a move-in ready home spent $250,496 for the property. Those who bought a fixer-upper spent an average of $199,819, but also spent an average of $47,072 on renovations if they stayed within their budget –just $3,605 less than the turn-key price. Those who went over budget spent an average of $75,922 on renovations, putting the total spend $25,245 above the price of the typical move-in ready home.
Eighty-six percent of fixer-upper owners whose repair budget fell within their expectations said they would buy the same home if they were able to do so again, along with 73 percent of those who spent less than anticipated. Among those who spent more than they expected on repairs, only 60 percent said they would repeat the purchase.
Thirty-seven percent of homeowners said a home improvement TV show had influenced their decision to buy a fixer-upper. The British show "Grand Designs" was the most influential program, followed by Bravo's "Million Dollar Decorators" and "Flipping Out."
The median respondent said they expect to live in their home for 15 years, and almost one in five said they don't plan on moving again. On average, respondents had been living in their home for 8.2 years; the homeownership tenure was slightly lower among those who purchased fixer-uppers, with an average residency of 7.7 years compared to 8.4 years among those who bought a move-in ready home.
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