Pros and Cons of Buying a Fixer Upper for Your Myrtle Beach Rental Property

Pros and Cons of Buying a Fixer Upper for Your Myrtle Beach Rental PropertyAfter you decide that to buy a rental property in Myrtle Beach, the next step is developing a strategy for what type of property to buy. Myrtle Beach real estate includes diverse options, with everything from a super low maintenance beachfront condo to a fixer upper that's ready for an overhaul. Here's what you need to know about the pros and cons of buying a fixer upper in Myrtle Beach for your investment property goals. 

Pros of Buying a Fixer Upper

Lower Purchase Price

One of the most significant advantages of choosing a fixer-upper for your vacation rental investment property is the potential for a lower purchase price. Fixer-uppers typically sell for less than move-in ready properties, allowing investors to acquire the property at a discount and potentially increase their return on investment (ROI) when renovations are completed.

There is also usually less competition for a fixer upper, which can help you avoid a multiple offer scenario in which you need to escalate your offer. 

Increased ROI Potential

Renovating a fixer-upper has the potential to increase the property's market value and rental income, resulting in a higher return on investment over time. By investing in strategic upgrades and improvements, you can enhance the property's appeal to guests, command higher rental rates, and maximize occupancy rates.

You can customization your plans in alignment with your target market and design everything with ROI in mind. With careful planning and execution, a well-renovated fixer-upper can generate substantial rental income and long-term profitability.

Rapidly Build Equity

Renovating a fixer-upper allows you to build sweat equity in the property by investing your time, effort, and expertise into the renovations. As you tackle renovation projects yourself or oversee the work of contractors, you can increase the property's value and equity through improvements and enhancements. Building sweat equity can result in significant financial gains when you eventually sell the property or refinance it to access additional capital and leverage it toward your future goals.

Cons of Buying a Fixer Upper

Unpredictable Costs and Timeline

One of the reasons some investors hesitate about a fixer upper is the unpredictability. Even with professional estimates, there is always the possibility that the property will cost more or take longer to get it ready to rent. 

From structural repairs and plumbing upgrades to cosmetic enhancements and landscaping, the costs of renovations can quickly add up and exceed your initial budget. It's essential to conduct a thorough inspection of the property and accurately assess the scope of work required before committing to a fixer-upper investment. This won't guarantee that you can avoid unpleasant surprises, but it will help.

Depending on the scope of work required and the duration of the renovation process, it may take weeks or even months before the property is ready to be marketed and rented out to guests. From structural issues and code violations to budget overruns and construction delays, there are numerous potential obstacles that can impact the success of your investment. It's crucial to be prepared for unexpected challenges and have contingency plans in place to address them effectively.

"Finding the right property for you is a unique, personal decision. You need to determine how much maintenance and renovation you are up for, and whether you want to put your own stamp on the property or get right to renting it out. Myrtle Beach has so many different properties, it's a great place to get into vacation rental investment properties." -Brian Percy, The Home Search

While fixer-uppers provide the potential for customization, increased ROI, and building sweat equity, they also come with challenges such as higher renovation costs, time commitment, uncertainty, delayed income generation, and financing and funding challenges. It's essential to weigh the pros and cons carefully and conduct thorough due diligence before embarking on a fixer-upper investment to ensure its success and profitability in the long run.

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