Written by: Carole Smith • October 4, 2023• Real Estate

You Won’t Like Our Answer

As South Florida Realtors, we are frequently asked, “Should I buy a move-in-ready or a fixer-upper home?” You’ll hate the answer almost as much as the person asking: It depends. If you need to be settled right away, have a fixed budget and despise delays and unexpected costs, find a move-in-ready home and a can of paint if you want to make it your own. If you have time, a flexible budget, a custom wish list and patience, a fixer-upper is something you could explore. But be warned: If you choose to entertain the latter, costs and delays have skyrocketed just like local home prices.

There are a few factors contributing to this increase in cost and duration. First, the cost of construction materials increased by 25% in 2020; and while they have decreased slightly in the past 12 months, they still cause sticker shock. Second, the supply chain disruptions caused by the COVID-19 pandemic (even now) have made it difficult for contractors to obtain some of the materials they need. This has led to longer lead times for materials and ongoing delays.

Finally, the labor shortage in the construction industry is also driving up renovation costs. There are simply not enough skilled construction workers to meet the demand, which is pushing up wages and contributing to higher renovation prices.

Given the current market conditions, we recommend that homebuyers carefully consider their budget and timeline before embarking on a renovation project. Here are some tips for those who are planning to renovate their homes in Miami:

Get multiple estimates and references from different contractors. This will help you to ensure that you are getting a competitive price and a trustworthy partner.

Be prepared for unexpected costs. Even with the best planning, there is always the possibility of unexpected costs arising during a renovation project. It is a good idea to have a 30% contingency fund in place to cover these costs.

Communicate regularly with your contractor. It is important to stay in communication with your contractor throughout the renovation process. This will help to avoid any misunderstandings or surprises down the road.

Despite the increased cost and duration of home renovations in Miami, there are still many benefits to renovating a home. A well-planned renovation can increase the value of your home as well as make it more comfortable and functional for your family. If you can weather the frustrations inevitable when renovating, consider including homes that need updating in your home search.

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