What to Consider Before You Commit

There’s something undeniably appealing about a fixer-upper.

Maybe it’s the Orlando home in a neighborhood you love that’s priced below the move-in-ready competition. Maybe it has the bigger backyard, better location or character you’ve been looking for, but the kitchen looks like it hasn’t been updated since the early 2000s.

Or maybe you’re thinking, How hard could it be to replace the floors and paint?

That’s where things can get interesting.

Buying a fixer-upper in Orlando can be an opportunity to create a home that fits your style while potentially getting into a desirable neighborhood at a different price point. But there’s a big difference between a home that needs some cosmetic TLC and one that needs major systems, structural work or extensive renovation.

Before you fall in love with the potential, you need to understand what you’re actually buying.

What Counts as a Fixer-Upper?

A fixer-upper isn’t necessarily a home that’s falling apart.

In real estate, the term can cover a pretty wide range of properties. One home might simply need new flooring, paint and updated fixtures. Another could need a new roof, electrical work, plumbing repairs, HVAC replacement and a complete kitchen renovation.

That distinction matters.

A home with outdated finishes can often be transformed over time. A home with significant underlying problems can require a much larger budget, longer timeline and greater tolerance for surprises.

The first question isn’t:

“Can I make this house beautiful?”

It’s:

“What will it take to get this house where I want it to be?”

Start With the Bones, Not the Kitchen

It’s easy to walk into an older home and immediately start mentally redesigning it.

You see the dated cabinets and picture a beautiful new kitchen. You see the old tile and imagine luxury vinyl plank flooring throughout the house. You see a dark living room and start thinking about paint colors.

Those things matter, but they shouldn’t be the first things you evaluate.

Before worrying about finishes, pay attention to the major systems and components of the home.

Roof

The roof should be high on your list, especially in Florida.

Ask about the roof’s age, material, condition and maintenance history. A roof that is nearing the end of its useful life can represent a significant expense, and roof condition can also matter when you’re obtaining homeowners insurance.

Florida’s Department of Financial Services notes that insurers may consider the age, type and condition of a home’s roof, along with other major systems. Older homes may also be subject to additional inspections, including four-point inspections covering the roof, electrical, plumbing and HVAC systems.

So if you’re considering a fixer-upper with an older roof, don’t wait until after closing to figure out what insurance might look like.

Electrical

Outdated electrical components can be much more important than whether the kitchen has ugly cabinets.

A professional inspection can identify visible concerns with the electrical system, including the service panel, wiring, outlets and grounding.

If you’re considering major renovations, it’s also worth finding out whether the existing electrical system can support the changes you have planned.

Plumbing

Look beyond whether the sinks and toilets currently work.

Ask about the age and condition of the plumbing, water heater and visible supply and drain lines. Leaks, outdated materials or damaged pipes can turn a seemingly manageable renovation into a much larger project.

HVAC

In Orlando, air conditioning isn’t exactly optional.

Find out the age and condition of the HVAC system and whether it has been regularly maintained. Replacing an aging system isn’t necessarily a reason to walk away from a home, but it absolutely belongs in your renovation budget.

A standard home inspection typically evaluates major systems such as the roof, plumbing, electrical and HVAC, along with structural components and other visible portions of the home.

The Inspection Is One of Your Most Important Tools

If you’re buying a home that needs work, a home inspection becomes even more important.

A home inspection isn’t designed to tell you whether you should buy the house. It’s designed to give you information about the property’s visible condition so you can make a more informed decision.

Florida Realtors recommends that buyers carefully vet inspectors, ask about qualifications and experience, attend the inspection when possible and understand that inspections are limited to visible conditions.

And don’t be surprised if the inspection report is long.

No house is perfect.

The goal isn’t to find a home with absolutely nothing wrong with it. The goal is to understand which issues are routine maintenance, which are manageable repairs and which could represent significant costs or risks.

Depending on what the general inspection uncovers, you may also want to consider additional specialized inspections.

Don’t Forget About Insurance

This is especially important for Florida fixer-uppers.

A home may look like a fantastic deal on paper, but you don’t want to discover after going under contract that insuring the property will be more complicated or expensive than expected.

Florida’s Department of Financial Services says insurers may consider factors including the home’s construction, age, roof age and type, location, prior claims history and the condition of major systems. An insurer may also request inspections or documentation related to the roof, plumbing, electrical system or HVAC.

Roof age deserves particular attention. Florida law provides specific protections related to homeowners insurance and roof age, including requirements involving inspection and useful life for certain older roofs.

The takeaway?

Get an insurance quote early.

Don’t assume the insurance situation will work itself out after you’ve fallen in love with the house.

Know the Difference Between Cosmetic and Structural

This is one of the biggest things to understand when evaluating a fixer-upper.

Cosmetic projects

These are generally the types of improvements buyers can see immediately:

• Paint
• Flooring
• Light fixtures
• Cabinet hardware
• Countertops
• Bathroom finishes
• Landscaping
• Appliances

These projects can still add up quickly, but they tend to be easier to understand and budget for.

Bigger-ticket projects

These are where you need to slow down:

• Roof replacement
• Foundation or structural concerns
• Major plumbing work
• Electrical updates
• HVAC replacement
• Water intrusion
• Mold or moisture issues
• Major additions or layout changes
• Significant exterior work

These projects can involve contractors, engineering, permits, inspections and potentially months of work.

If the house needs several major systems replaced at once, you’re no longer just buying a home that needs some updating.

You’re taking on a renovation project.

Don’t Forget About Permits

If you’re planning renovations in the City of Orlando, don’t assume every project can simply be handled with a contractor and a credit card.

The City of Orlando states that construction and renovation projects require different types of permits, and Florida law requires permits for many types of residential work. Electrical and plumbing work can require their own permits as well.

The city also warns that failing to close out permits can create problems later when selling a property.

That means your renovation budget should account for more than materials and labor.

Before making major plans, determine:

• What permits are required
• Who will pull the permits
• Whether plans or engineering are required
• How inspections will work
• Whether the existing home has open or unresolved permits

Your real estate agent, contractor and local permitting department can help you understand the process for a specific property and project.

Build a Renovation Budget Before You Make the Offer

Here’s where fixer-uppers can get people into trouble.

They calculate:

Purchase price + estimated renovation = total cost

But that’s rarely the whole picture.

You also need to think about:

• Inspection costs
• Appraisal
• Closing costs
• Permits
• Contractor labor
• Materials
• Appliances
• Temporary housing, if necessary
• Storage
• Landscaping
• Unexpected repairs
• Financing costs
• Insurance
• Ongoing utilities and carrying costs

And then there’s the thing every renovation eventually seems to uncover:

the “while we’re at it” project.

You replace the cabinets and realize the plumbing needs work. You open a wall and discover outdated wiring. You replace the flooring and realize the subfloor needs attention.

That’s why having a contingency built into your renovation budget is so important.

Think About the Finished Home, Not Just the Purchase Price

One of the biggest mistakes buyers can make is comparing a fixer-upper’s purchase price to the asking price of a move-in-ready home without accounting for the renovation.

Instead, think about the all-in cost.

For example:

Fixer-upper:
Purchase price + renovation + carrying costs + contingency

Move-in ready:
Purchase price + immediate maintenance/upgrades

The fixer-upper may still come out ahead.

Or it may not.

That’s why the numbers need to be evaluated on a property-by-property basis.

And remember: the finished value of the home matters, too. You don’t want to pour $150,000 into a renovation simply because you love the design if the resulting home won’t make financial sense compared with other properties in the area.

Your agent can help you look at comparable homes and understand what similar properties are selling for.

So, When Does a Fixer-Upper Make Sense?

A fixer-upper may be worth considering if:

• You love the location
• The floor plan works for you
• The major systems are in reasonable condition
• The renovation needs are clearly defined
• You have room in your budget for unexpected costs
• You have the time and patience for the process
• The projected finished value makes sense
• You’re comfortable living through some level of construction

The right fixer-upper isn’t necessarily the cheapest house you can find.

It’s the house where the potential makes sense relative to the work required.

And When Should You Walk Away?

Sometimes the best renovation decision is deciding not to renovate.

Be cautious when a property has multiple major issues that would need to be addressed simultaneously, particularly when you don’t have a clear understanding of the costs.

Significant concerns involving water intrusion, major electrical problems, structural movement, roof issues or extensive plumbing problems deserve careful professional evaluation before moving forward. These are the types of issues that can create substantial uncertainty in a renovation project.

You should also reconsider if the project would stretch your finances so far that you have no room for unexpected expenses.

A fixer-upper should be a project you can reasonably manage, not one that leaves you financially cornered.

The Right Fixer-Upper Can Be Worth It

Buying a fixer-upper in Orlando isn’t automatically a good idea or a bad one.

It comes down to the property, the neighborhood, the numbers and your willingness to take on the work.

The appeal is easy to understand: you may be able to buy into a neighborhood you love, customize the home to your taste and create something that feels uniquely yours.

But before you start picking out backsplash tile, take a step back.

Look at the roof. Look at the systems. Look at the inspection. Look at the insurance. Look at the permits. And most importantly, look at the numbers.

If the opportunity still looks good after you’ve done your homework, that fixer-upper might just be worth fixing.

Thinking about buying a home in Orlando that needs a little — or a lot — of work? A local real estate professional can help you evaluate the property, understand comparable sales and build an offer strategy around the actual condition of the home.