F
lipped properties still draw more buyers than older listings, but their advantage has shrunk sharply since 2021 as mortgage rates rose, new Realtor.com research shows. Today’s buyers still crave move‑in‑ready upgrades, yet they’re less willing to pay a hefty renovation premium at current rates, making the decision to purchase a home “as‑is” more complicated than ever.
Fixer‑uppers can list about 54 % below the national median for single‑family homes, but that discount hides a steep cost: every deferred repair, broken system, and outdated finish is part of the purchase. The resale upside on those fixes has also slipped. Renovated homes now sell at an 8.3 % discount from their peak post‑renovation price, compared with only 0.9 % in 2021. Even in markets where renovations can lift a home’s value dramatically—what Realtor.com calls a high “flip factor”—buyers are more hesitant than in the low‑rate era.
That doesn’t mean as‑is homes are a bad bet. The lower entry price can be a gateway for buyers who otherwise couldn’t afford a move‑in‑ready property. But it raises the stakes on budgeting. Buyers must juggle the purchase price, the risk of running out of money after closing, and the danger of over‑investing in projects that won’t pay off. Experts suggest setting aside 10 %–20 % of the purchase price for upgrades. For older, vacant, or neglected homes, renovation costs can hit 50 % or more, with some repairs required before closing to secure financing or insurance.
Not every fixer‑upper needs a gut renovation. The budget depends on what’s wrong and how much work is truly optional.
**Cosmetic repairs**
At the low end, cosmetic issues dominate. Brett Johnson, a real‑estate investor and flipper with New Era Home Buyers, recommends allocating 10 %–20 % of the purchase price for homes that mainly need paint, flooring, or outdated fixtures. On a typical $200,000 fixer‑upper, that’s $20,000–$40,000. Johnson notes that “condition tier matters more than age alone,” so a well‑maintained 1970s house may cost less to rehab than a newer home with neglected systems.
**Core‑system replacements**
Mid‑range fixer‑uppers often require entire systems to be replaced. A recent Hippo survey found frequent repairs to flooring, ceilings, appliances, plumbing, and windows. Individual fixes ranged from $274 to $1,600, but the cumulative cost can be substantial. Common system repairs include roof replacements ($10,000–$18,000), sewer line work ($6,000–$15,000), and HVAC or electrical upgrades ($5,000–$12,000), depending on condition and code.
**Structural and safety issues**
At the high end are homes with major structural risks. Melanie Musson, an insurance and finance expert at Clearsurance, estimates a full rewiring job at $20,000 or more, especially in older homes where the system hasn’t been updated in decades. Insurers may refuse coverage for unsafe roofs or electrical systems until repairs are made, adding a time imperative that often comes with extra costs.
The most expensive repair is a new foundation. Mitch Coluzzi, a seasoned home investor at SoldFast, cites foundation costs ranging from $30,000 to $80,000. Musson echoes that foundation damage is often so costly that it may not be worth fixing, as shifting earth can cause recurring problems. If a buyer still decides to move forward with a home needing major structural rehab, Musson recommends budgeting at least 50 % of the purchase price for upgrades—likely front‑loaded in year one. A $200,000 purchase could quickly become a $300,000 (or greater) investment.
**Why as‑is sales can fall apart**
If an as‑is deal can’t clear basic financing and insurance hurdles, the contract can collapse. Government‑backed loans, such as FHA, have strict safety and standards requirements. Coluzzi notes that FHA is “super picky” with as‑is sales; utilities often aren’t on, which flags the appraisal as non‑compliant. Appraisers may devalue houses with defects and overestimate repairs, and they usually want repairs done before final appraisal. FHA appraisals require core utilities and systems to be operational, a functioning heating system, and baseline health and safety standards. If utilities can’t be turned on, the roof is failing, or there are safety hazards, financing can stall, require repairs before closing, or fall apart entirely.
**Renovation loans as an option**
Some buyers have an “escape hatch”: renovation loans that roll repair costs into the mortgage. Fannie Mae’s HomeStyle Renovation and Freddie Mac’s CHOICE Renovation finance a purchase (or refinance) plus qualifying improvements in a single loan, with lender oversight of the renovation plan and draw/inspection requirements. However, not every lender offers these products, and the timeline to closing can be longer. Buyers should explore them early with a lender, not as a last‑minute fix.
**Who can afford as‑is?**
Buying a home as‑is works best for buyers with enough cash left after the down payment and closing costs to cover repairs, inspections, and a cushion for surprises. That’s why many as‑is homes go to investors or flipping companies—they have the cash to handle additional costs. Successful buyers also often have reliable contractors or can handle some work themselves, and they bring flexible timelines to manage renovation uncertainty. If you have significant cash reserves, industry connections, and flexibility, you may be well positioned to buy a fixer‑upper. If you’re spending everything to get in the door, an as‑is home is likely the wrong bet. Urgent repairs—leaks, failed heat, electrical hazards—won’t wait for your next paycheck and can’t be postponed without risking safety or insurability.
