The Santa Fe real estate market is constantly evolving, requiring extensive market research before making the decision to buy a home. When looking at Santa Fe homes for sale, buyers have the choice of purchasing a turn-key home, one that is ready to move in immediately, or buying a fixer-upper home.
There are pros and cons in making the decision to buy a fixer-upper or a move-in-ready home. These positive and negative factors should be considered and weighed carefully before entering the Santa Fe real estate market.
Pros of buying a fixer-upper home
A fixer-upper can be a smart way to enter the real estate market, especially for buyers with an experienced real estate team and knowledge of the regional market.
Lower sale price
Homes that are considered fixer-upper homes or distressed properties come at a lower initial sales point than move-in-ready homes in the same location, making them attractive for buyers wanting a smaller initial investment. Your total mortgage or cash investment will be lower, leaving a larger budget for the needed renovations.
Customized style
A home that needs to be renovated or repaired is somewhat of a blank slate. Buyers can take the liberty to create a home with architectural and interior features that match their preferred home style. In Santa Fe, popular architectural styles include Adobe Pueblo, Mission Revival, Victorian, and Italianate. Buyers have the ability to style their fixer-upper to fit their unique architectural style.
Homeowners planning a large-scale remodel can customize a floor plan and features that perfectly fits their needs. Buyers might add a larger kitchen, create a more open floor plan suited to the Santa Fe weather, or install energy-efficient cooling systems, which is a nice benefit when living in the hot desert climate.
Adding value
Homes that are in need of intensive remodels have a high potential ROI (return on investment). Major upgrades to a property can greatly increase the resale value, which is an important consideration for all homebuyers. In the Santa Fe market, certain renovations can add tens of thousands to the property value. Projects with the highest cost recovery include new wood flooring, upgraded insulation, and new roofing.
Cons of buying a fixer-upper home
Despite the appeal of buying a lower-cost home that you can make into your dream house, there are some drawbacks to buying a property that requires intensive repair and renovation.
Local regulations
There are five protected historic districts within the city of Santa Fe. Within these districts, any home that is more than 50 years old is regulated by strict codes regarding both new construction and remodels. There is a lengthy application and review process required if you want to make changes to a structure in one of these protected districts, which is a distinct drawback to purchasing a historic home.
There is also the possibility that the application will be amended or denied by the review board. Buyers looking to renovate a historic Santa Fe home can run into unforeseen expenses if they have to alter plans after a denial, and the overall remodeling vision might need to be changed.
Hidden costs
You will have an estimated budget in place when you go into a fixer-upper investment, but there are almost always unexpected costs that will come up during the renovation. Common architectural styles in Santa Fe, like adobe walls and flat tile roofs, can be more costly than some buyers anticipate.
The climate of New Mexico can add extra costs, especially if the home needs updated heating and cooling systems to cater to the extreme summers and cool winters. Additionally, if you are not able to live in the home while it is being renovated, you will need to pay for living expenses somewhere else during the remodeling phase.
Time and stress
Remodeling or renovating a home is not only a financial investment; it is also a major time commitment. Depending on the scale of the planned repairs, buying a fixer-upper can be a drawn-out process for buyers.
Committing to a home remodel can be a major stressor as logistical and financial complications can occur. Those looking at a Santa Fe fixer-upper should consider the emotional toll of purchasing a home that will require intensive renovations.
Pros of buying a move-in ready home
Move-in ready homes are a great investment for those looking for a relatively quick and easy real estate transaction in the Santa Fe market.
Ease and simplicity
Santa Fe homes that are turn-key are an easy, uncomplicated real estate investment. They do not require major repairs and are ready for immediate residence. Buyers have no need to source materials, hire contractors, or apply to review boards. Once the closing papers are signed, life at the new home can begin immediately.
Predictable costs
Purchasing a move-in ready home comes with a fixed price point without unexpected renovation expenses. A home that is fully ready for new owners is up to code and does not require any major investment in things like plumbing or electrical systems. This makes the financial responsibility much more predictable, which is a comfort for many buyers.
Cons of buying a move-in ready home
Homes that are considered move-in ready are not without their own set of unique drawbacks that are important to consider.
Higher sales price
Turnkey homes have a higher sales price than those that are considered fixer-uppers in the same neighborhood. Modern floor plans, updated appliances, and sleek interiors all come at a higher price point. This means that buyers will have a higher initial investment when looking at a move-in-ready home.
Compromise required
If you are set on a home that is ready for move-in, you might need to make concessions in certain areas. If your heart is set on a certain Santa Fe neighborhood and you want a turnkey property, you might need to look at homes that are smaller than you would like in order to stay within your budget. Purchasing a home that is sized for your family might require you to sacrifice things like a convenient location or a specific school district.
Lack of personalization
Move-in-ready homes have a set floor plan, defined exterior features, and a fixed architectural style. Instead of creating a home that works for you, a turnkey home is a fixed property with a predetermined structure and style. Homebuyers who want a move-in ready home may need to sacrifice in the customization department.
An experienced real estate team
Connecting with an experienced real estate team is important before entering the Santa Fe market. An expert agent can help you find the perfect fixer-upper or move-in ready home, connect you with local contractors, and make your entire real estate transaction run smoothly.
Are you ready to find your perfect Santa Fe home? Contact the Ricky Allen, Cathy Griffith, and Tara Earley Team to start your home search today. They have years of experience in the Santa Fe luxury real estate market and can help you navigate the buying process.
