Should You Buy a Home That Needs Renovations?

Published On: May 3, 2025|Categories: Real Estate|

Buying a home that needs renovations can be a smart move—or a costly mistake. Whether you’re looking at older homes in Jasper, mid-century properties in Evansville, or a dated gem in Dubois County, it’s important to weigh the pros and cons before you make an offer.

This guide explains the following:

Benefits of buying a home that needs work
Risks and challenges of fixer-uppers
How to estimate renovation costs
What loan options are available for renovation buyers
When a renovation project makes sense

Here’s a closer look at each.

Benefits Of Buying A Home That Needs Work

Buying a home that needs renovations can come with several advantages—especially in a competitive market. Here’s why some buyers go this route:

Lower purchase price: Homes that need work are often priced below market value
Less competition: Many buyers prefer move-in-ready homes, so you might face fewer competing offers
Opportunity to customize: You can update the home to match your style, layout preferences, and needs
Potential for equity: If you buy below market value and renovate wisely, you may build equity quickly

This approach can work well in places like Huntingburg or Ferdinand, where homes with “good bones” may just need cosmetic updates.

Risks And Challenges Of Fixer-Uppers

Of course, not all renovation stories end well. There are some serious risks to consider before taking the plunge:

Renovation costs add up fast: Even small projects can exceed your budget once you factor in labor, permits, and materials
Hidden problems: Older homes may have outdated wiring, plumbing issues, mold, or structural problems you won’t find until demolition begins
Longer timeline: You might not be able to move in right away, or you may need to live through construction
Financing can be tricky: Not all loan types work with homes in poor condition
Resale uncertainty: If you over-improve the home compared to the neighborhood, you might not get your investment back

Your REALTOR® can help you evaluate a home’s potential—and point out red flags that suggest the home may not be worth the risk.

How To Estimate Renovation Costs

Before making an offer, try to get a realistic idea of what renovations will cost. You can:

Hire a contractor to walk through the home with you before closing
Get quotes for specific repairs or upgrades you know you’ll need
Ask your REALTOR for local contractor referrals—many agents know who’s trustworthy and who gives accurate estimates
Add a cushion of 10% to 20% to your estimated budget in case of surprises

Also, schedule a home inspection as soon as possible. The inspector can’t see behind the walls, but they can identify issues like water damage, foundation cracks, roof problems, and outdated systems—all of which can blow up your renovation budget quickly.

What Loan Options Are Available For Renovation Buyers

If you need help financing the renovations, you may be able to roll those costs into your mortgage using a special type of loan. Options include:

FHA 203(k) loan: Allows you to borrow for both the purchase and renovations. Great for first-time buyers but has limits and extra oversight
Conventional renovation loans (like Fannie Mae’s HomeStyle®): More flexible, but usually require higher credit scores
VA renovation loans: For eligible veterans buying homes that need repairs
Personal loans or HELOCs: If you already own a home or have strong credit

Keep in mind these loans often come with extra paperwork, inspections, and timelines, so talk with a lender early in the process. For general information, you can also explore housing resources through IN.gov.

When A Renovation Project Makes Sense

So—should you go for it? Buying a fixer-upper might be a good idea if:

You have access to reliable contractors or plan to do some of the work yourself
You’re prepared for a longer timeline and potential surprises
You’ve been priced out of updated homes in your target neighborhood
You’re working with a REALTOR who understands renovation-friendly financing
You have emergency savings in case of unexpected costs

It might not be the right choice if:

You need to move in quickly
You’re relying on tight monthly finances with no buffer
You’re uncomfortable with the unknowns of construction
You don’t have access to skilled professionals

In areas like Santa Claus or Newburgh, where some homes have been well-maintained over the years, the renovation route could give you more options in a tight market—but only if you’re ready for the process.

FAQ About Buying Homes That Need Renovations

Check out these commonly asked questions about buying a fixer-upper. If you don’t see your question here, please call our office and we’ll find you the answers you need.

Can I Get A Mortgage On A Home That Needs Work?

Yes—but the extent of the repairs matters. If the home is still habitable and safe, most conventional or FHA loans are fine. If major repairs are needed, you may need a renovation-specific loan.

Do I Need A Bigger Down Payment For A Fixer-Upper?

Not necessarily. Standard loan requirements still apply. However, if you’re rolling renovation costs into the loan, you may need to meet additional lender requirements.

What Should I Look For In A Fixer-Upper?

Look for homes that need cosmetic updates—like paint, flooring, or kitchens—not structural repairs. These are easier, cheaper, and less risky to take on.

Will A Home Inspection Reveal All The Problems?

Not always. Inspections are visual and non-invasive. They’re a great starting point, but they won’t uncover everything hidden behind walls or under floors.

How Do I Know If It’s Worth Renovating?

Compare the total cost (purchase + renovations) to the market value of updated homes in the area. If you’ll come out ahead—and enjoy the finished product—it might be worth it.

Buying a home that needs renovations can be a smart path to homeownership—if you plan carefully and understand the risks. Your REALTOR can help you find the right property, connect you with local pros, and guide you every step of the way. Whether you’re searching in Dubois County or nearby, you don’t have to figure it out alone.

$785,000

410 Riverside Drive Jasper, Indiana

7 Beds 6 Baths 5,132 SqFt 1.13 Acres

Listing courtesy of Brenda Welsh from SELL4FREE-WELSH REALTY CORPORATION.

$524,700

3289 St. Charles Street Jasper, Indiana

4 Beds 4 Baths 3,906 SqFt 0.595 Acres

Listing courtesy of Brenda Welsh from SELL4FREE-WELSH REALTY CORPORATION.

$479,000

282 Kaywood Lane Jasper, Indiana

4 Beds 4 Baths 3,627 SqFt 0.8 Acres

Listing courtesy of RyanCraig from RE/MAX Local.

$420,000

4298 W Beringer Drive Jasper, Indiana

4 Beds 3 Baths 1,636 SqFt 0.48 Acres

Listing courtesy of Opal Sermersheim from SELL4FREE-WELSH REALTY CORPORATION.

$409,900

1479 Martha Drive Jasper, Indiana

3 Beds 4 Baths 3,087 SqFt 0.46 Acres

Listing courtesy of Gary Schnell from SELL4FREE-WELSH REALTY CORPORATION.

$359,700

1735 W 5th Street Jasper, Indiana

3 Beds 3 Baths 2,719 SqFt 0.82 Acres

Listing courtesy of Brenda Welsh from SELL4FREE-WELSH REALTY CORPORATION.

$354,700

464 Kluemper Road Jasper, Indiana

3 Beds 2 Baths 1,851 SqFt

Listing courtesy of Brenda Welsh from SELL4FREE-WELSH REALTY CORPORATION.

$349,700

375 Daisy Lane Jasper, Indiana

4 Beds 4 Baths 3,274 SqFt 0.31 Acres

Listing courtesy of Brenda Welsh from SELL4FREE-WELSH REALTY CORPORATION.

$329,700

391 Gardenia Lane Jasper, Indiana

3 Beds 3 Baths 2,977 SqFt 0.25 Acres

Listing courtesy of Brenda Welsh from SELL4FREE-WELSH REALTY CORPORATION.

$262,900

4020 N Portersville Road Jasper, Indiana

3 Beds 2 Baths 1,258 SqFt 0.47 Acres

Listing courtesy of Gary Schnell from SELL4FREE-WELSH REALTY CORPORATION.

Are You Thinking of Buying a Home in Dubois County?

Use our site to search homes for sale in Jasper, Dubois, Spencer, Martin and Davis counties, as well as all the surrounding communities. Unlike the “big name” sites out there, at Sell 4 Free Welsh Realty, our site is directly connected to our local MLS. We update it with new homes every hour.

Sign up for new listing alerts so you can stay on top of the newest homes for sale – and get price change alerts so you can stay ahead of other buyers and beat them to the hottest deals!