Fixer-Upper vs. Move-In-Ready: What’s the Real Cost Difference? 

When buying a home, there are basically two categories of property: a place that needs some work and one that doesn’t. 

Anyone who’s been on the house hunt for a while has no doubt seen their share of both—and understand that typically, fixer-upper homes cost less while move-in-ready homes cost more. If you’re willing to buy a fixer-upper, you’ll save money upfront and likely see a greater windfall when it’s time to sell. 

On the other hand, a move-in-ready home doesn’t require putting in any sweat equity, and your calculations on how to make a profit are a lot simpler. 

How can you calculate whether investing in a home that needs work is worth your time, money, and effort? And when does settling for a turnkey home, if you can afford it, make more sense?

The real math behind fixer-uppers

Buying a fixer-upper and making the updates and renovations yourself is a romantic and popular idea. But does it make sense for the everyday person to take on?

Let's say you're comparing a $350,000 fixer-upper to a $450,000 move-in-ready home in the same neighborhood. That $100,000 gap is significant, but here's where the math gets interesting.

First, review typical renovation costs. The national average cost of a kitchen remodel is over $27,000, but a full gut can reach nearly $80,000. The average bathroom remodel goes for about $25,000 and reaches upward of $78,000. A new roof costs an average of over $30,000. The costs go on and on for new floors, new siding, new windows, and electrical updates. 

Very quickly, depending on how much work the home needs, you can blow past the $100,000 you “saved” by not buying the move-in-ready home. And that’s before taking into consideration other costs.

If you’re not living in the home while the work is being done, you’re paying a mortgage, insurance, and taxes to live somewhere else. Meanwhile, the hours of sweat equity you’ve put in represent the time not spent earning income or living your life. 

And these numbers and expectations are for when everything goes to plan—which is never a guarantee. 

“The biggest surprise isn't the finishes, it’s what’s behind the walls,” says Alex Filipuk, founder and CEO of Ideal Siding. “Structural issues, moisture damage, outdated electrical, and envelope failures routinely add costs homeowners didn’t plan for.”

This means giving yourself more room for error in your calculations—especially if it’s an old home and especially if the work is critical to the home being livable. 

“A realistic rule of thumb: budget 20% to 30% beyond your initial renovation estimate, and if the home is older than 30 to 40 years, lean toward the higher end. Most first-time buyers underestimate the cost of making a house sound before making it beautiful,” says Filipuk.

The reality of financing a home that needs work

Let’s say you’ve got $125,000 in renovation costs staring you in the face. The question now is: Where is that money actually coming from?

“Renovation costs are rarely the main issue. Financing is where buyers feel the pressure most,” says Nick Smith, an interior designer and furniture designer.

Most conventional mortgages won't cover a house that's not livable at closing. If the home lacks working heat, has electrical issues, or fails the appraisal due to its condition, you'll need alternative financing—and that means more complexity and cash upfront.

Your main renovation loan options are FHA 203(k) loans and Fannie Mae HomeStyle loans. Both roll purchase price and renovation costs into a single mortgage, but they come with catches. 

“Renovation loans release funds in stages, which means buyers need more cash upfront than they expect. That gap often causes delays or compromises that increase total spend,” says Smith.

In addition, you’ll need detailed contractor bids before closing, and only licensed contractors can do the work. The approval process takes longer, and interest rates may run slightly higher than conventional loans.

Because of this, many buyers end up needing significant cash. You might cover the purchase with a conventional mortgage, then pay for renovations out of pocket or through a home equity line of credit—but that requires having $100,000 or more after your down payment and closing costs.

This is often the deal breaker. That $350,000 fixer-upper might require $70,000 down (20% to get better rates) plus $125,000 in cash for renovations. You need $195,000 available. Meanwhile, the $425,000 move-in-ready home requires only $85,000 down.

This is why the financing math alone can make the "cheaper" option unaffordable for most buyers.

“From what I see on real renovation projects, fixer-uppers only make financial sense in specific situations. The headline saving often disappears once you factor in cash flow strain, extended timelines, and the cost of simply getting the home livable,” says Smith. 

When a fixer-upper makes sense

So what are those ideal fixer-upper scenarios?

The ideal fixer-upper buyer has substantial cash reserves beyond the down payment and either construction experience or strong contractor relationships. Time is on their side: They can afford a six- to 12-month renovation while living elsewhere.

Location often tips the scale. In competitive neighborhoods where move-in-ready homes are out of reach, a fixer-upper might be your only entry point. If the bones are good—solid foundation, sound structure, desirable lot—cosmetic updates and system replacements can be worthwhile investments.

There's also the customization factor, for those who can afford it.

"The problem with new construction and newly renovated is that it's never done exactly how you want," says James Hawk, a real estate investor who has been flipping homes since 2010. Renovating lets you avoid settling for someone else's taste or paying a premium for finishes you'll eventually change anyway.

Done right, fixer-uppers can also build significant equity.

"If you're savvy and willing to put in the work, buying a fixer-upper can provide homebuyers the opportunity to be in a better equity position upon completion," Hawk says.

Success, however, requires brutal honesty about your situation. You need the financial cushion, the time to manage what's essentially a part-time job, and realistic expectations.

As Hawk warns: "Just make sure you're buying at the right price, and overestimate the renovation budget.”

When to opt for a turnkey home

Sometimes the higher price tag is actually the better deal.

If you need to move quickly—job relocation, lease ending, growing family—you can't afford to wait out a yearlong renovation. Turnkey means you close and move in within weeks, not months.

Limited cash beyond your down payment also makes the decision easy. If you don't have six figures sitting around postclosing, renovation loans add complexity you might not want to navigate as a first-time buyer.

Your risk tolerance matters, too. Fixer-uppers are inherently unpredictable. If surprise costs, timeline delays, and contractor drama would keep you up at night, pay the premium for certainty. This is especially true if you lack construction knowledge or don't have time to manage the project.

Finally, consider the market. In some neighborhoods, the price gap between fixer-uppers and turnkey homes is surprisingly narrow. If you're saving only $30,000 to $50,000 on the purchase price, the math tips heavily toward move-in-ready once you factor in renovation costs, carrying costs, and your time.

The truth: Fixer-uppers rarely save money when you account for renovation costs, financing hurdles, carrying costs, and timeline delays. But they're not always about saving money—they're about access and control as well. A fixer-upper can get you into a neighborhood you couldn't otherwise afford or let you create exactly the home you want.

The key is running your specific numbers with clear eyes, being honest about your cash reserves and available time, and understanding that sweat equity is real equity only if you actually have the skills, resources, and bandwidth to see it through.