Is Buying a Fixer Upper in St. George Worth It?

With concerns about rising interest rates and competition in the St. George real estate market, the idea of buying a fixer-upper might sound like a smart way to get into the home of your dreams for less. And sometimes, it really is a great investment if you go in with your eyes wide open. But how do you know if a fixer-upper is worth it?

Keep reading for our thoughts on how to tell if you’re getting a good deal, what risks you need to be aware of, and how to decide if buying a fixer-upper is the right move for you.

What is Considered a Fixer Upper?

First, let's explain what we mean by fixer upper. We're not talking about a home that needs some fresh paint or has lighting fixtures you don't like. A fixer-upper is typically a home that needs repairs, updates, or upgrades before it’s fully functional, safe, or stylish. Some fixer-uppers just need significant cosmetic work like fresh paint and new flooring, but others might require more serious renovations like electrical rewiring, roofing, foundation repairs, or plumbing upgrades.

How to Know You're Getting a Good Deal on a Fixer Upper

A fixer-upper can be worth it, but only if the numbers make sense. Here’s how to evaluate whether you’re looking at a smart investment or a money pit:

Start with the ARV (After Repair Value)

Research what comparable homes (in size, location, and condition) are selling for in the area after they’ve been updated. This is your target resale value or market value once the renovations are complete. In other words, whether you plan to flip the property for profit or just hold onto it for yourself, don't invest more than is worth it when you look at how much the home will be worth after renovation. 

Be Realistic with Renovation Estimates

This is where so many people go wrong. They underestimate the cost to renovate, often overestimating their ability to save money through DIY projects. Have a contractor give you a detailed estimate for the needed work. Don't guess or assume—you need accurate numbers, including labor, materials, permits, and contingencies, and it's usually a good idea to plan on 10–20% extra for unexpected issues.

If you have the skillset to DIY some things, that's a great way to save money, but be realistic about what you can do safely and efficiently. 

Subtract Renovation and Holding Costs from the ARV

Take your ARV and subtract the total cost of repairs and the purchase price of the home. Don’t forget to include temporary housing costs, property taxes, insurance, and utilities while you renovate.

Ideally, after all the work is done, you should have gained equity in the home. If not, you’re spending a lot of time and money without increasing the home’s value, so it may not be worth it financially.

When Does a Fixer Upper Make Sense?

The bottom line? A fixer upper might make sense if:

• You're handy or experienced in home improvement
• You have access to reliable, affordable contractors
• You want a custom home but can't afford move-in ready in your dream neighborhood
• You're comfortable living through renovations or can afford to live elsewhere during the work
• You plan to stay long enough to benefit from appreciation

If these things aren't true of you, and affordability is a primary motivator for buying a fixer upper, we may be able to help you find an alternative that doesn't involve the same time commitment and risk. 

A fixer upper is worth it depending on your goals, your budget, and your tolerance for renovation chaos. If you find a home with solid bones in a desirable location, and you can buy it far enough below market value to make the renovations worthwhile, it can be a fantastic opportunity. But if the numbers don’t work (or you’re not ready for the time and stress involved) it might be better to look for a move-in ready home that checks most of your boxes.

Ready to learn more about homes for sale in St. George? Whether you decide on a fixer upper or something move-in ready, we're here to help every step of the way. Contact us any time to get started.