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Before and after of a house renovation carried out by DosPlanos, a home remodeling company in Madrid.

Is it better to buy a fixer-upper, or an already renovated apartment?

Most people I have posed the question to of whether they thought it was better to buy an apartment that was already renovated or to do the renovations themselves, did not have an unequivocal answer. I am not surprised: there is more to this question than meets the eye, as both options have clear advantages and disadvantages. So the answer in most cases is “it depends.”

The preliminary questions you have to ask yourself are:

How much equity (your own funds) do you have to purchase the house?

Do you have time, and experience with renovations?

What will the primary use of the house or apartment be?


Your own funds, or savings, need to suffice to cover three concepts:

  1. The down payment: the part of the purchase price that is not financed by the mortgage. Nowadays in Spain, in general this will amount to 20% *.
  2. The expenses associated with the purchase: the ITP (property transmission tax), the notary and registry fees, your real estate personal shopper’s fees, the cost of the official appraisal … the total amount will vary, but a good rule of thumb is to put aside a 10% of the purchase price *.
  3. The renovation: the cost of the renovations are generally not covered by the mortgage either, thus you have to estimate approximately how much the renovations will cost, and see if you have enough funds for them *.

Depending on how much money you have saved and can invest in your purchase, paradoxically it may happen that even if you would prefer to by a to-be-renovated apartment and renovate it yourself, you might not be able to afford it!

Let’s see an example:

Imagine that you have € 150,000 in savings. The apartment you like costs € 450,000, and needs about € 30,000 – € 40,000 in renovations. If you put aside € 90,000 (20%) for the down payment and about € 45,000 (10%) for the expenses, you are left with € 15,000 to spend on renovations. Clearly, your funds are not enough. You could not afford to buy this apartment and renovate it yourself.

However, this very same apartment, if it were sold already renovated, would probably cost around € 500,000. If you bought it, you would pay € 100,000 down payment plus € 50,000 expenses. With your € 150,000 of savings, you could afford to buy the renovated apartment.

You may have noticed that buying the renovated apartment in this example, you are paying a € 10.000 – € 20.000 “surcharge”, because the price difference between the to-be-renovated purchase price and the renovated purchase price is greater than the estimated cost of the renovations. This is quite normal: whoever sells a renovated property wants to get a compensation for the time, money and effort they invested in carrying out the renovations.

This example illustrated the reason I always say that IF you can afford it, it is more profitable to do the renovations yourself. But as you have seen with the above example, if you do not have enough savings to pay for the renovations, buying an already renovated apartment can be more financially viable.

At Property Buyers by Somrie, when we work for a client who doesn’t have a clear preference for a renovated or non-renovated apartment, we always do a quick financial analysis before even starting to look for an apartment or house. We start with a mortgage study to find out what maximum mortgage amount and LTV (“loan-to-value”, ie. percentage of financing) the banks are going to grant. With this info, it is easy to calculate how much will have to be spent on the down payment and expenses. As for the cost of the renovations, we have contacts in the sector and professional simulation tools that allow us to have a pretty accurate idea of ​​how much they would cost in each case. Thus, when it comes to choosing an apartment, our clients only have to decide whether they like the house or not, knowing for sure that the numbers will add up!

edificio ruinoso


People have a hate-love relationship with house renovations. There are those who love to do them, while others consider them a real nightmare. Whatever your case may be, one thing is clear: renovations require time and dedication.

There are 3 types of people who generally prefer to AVOID having to renovate:

  • People who are not physically in the city where they want to buy. They tend to buy apartments that have already been renovated because they do not know trustworthy renovation companies in the area and find it impossible to properly monitor the works.
  • People who due to their jobs have very little time.
  • People who have had bad experiences in the past with renovation.

The main risks involved in doing a house renovation is that it can take longer than expected, and cost more than expected. Steps can be taken to minimize these risks, but it is impossible to completely eliminate them, and unforeseen pitfalls are bound to arise even with the most thoroughly planned project.


What do we at Property Buyers do to help our clients in this regard? When we work with a client who would theoretically prefer to do their own renovations but falls into one of the categories mentioned above (too little time, not physically in the city, bad past experiences), after the initial purchase of the house we offer a second phase of services, during which we help them with the renovations. We have contacts with several solid, trustworthy renovators whose work we already know, and thus we can recommend the one that best suits the client’s profile and budget. And we can also supervise the work, sending regular progress reports. Just as we have acted as their “feet and eyes in the market”, we continue to do so during this phase.

And let’s not forget that the real estate personal shopper service pack includes a technical report by an architect in which we inform the buyer BEFORE signing the purchase of any observable complications and constructive deficiencies in the house or building.

salón a reformar


This question is possibly the most important one. Options are, among others: use as your primary or secondary residence, resale, or rental.

Let’s analyse if it is better to buy a renovated or to-be-renovated apartment in each of these cases:

If you are going to buy a home for personal use

In general, it would be more interesting to do the renovations yourself because this way the outcome will be 100% to your liking, you have control over the quality of the materials used, and the final result will fit you like a glove.

But of course, it is often not that simple: you have to take into account the other two questions as well, that is, whether your level of equity is sufficient to pay for the necessary renovations, and if you can afford the time it will take to finish the works.

Imagine that you need to sell before you can buy: it would not be very practical to get into a full house-renovation because you have already sold your previous home and need a place to live (you and all your stuff).

Another very clear example: you are moving to a new city because you are starting a new job. Again, it is not practical to get into a huge renovation because you might not have that much time. In these cases, I usually recommend buying a nicely renovated apartment, or even a furnished one!

Piso moderno y reformado Madrid


If you are going to buy a home to resell it

The answer in this case is crystal clear: you have to buy a fixer-upper and renovate it yourself.

The very concept of “fix & flip” says it: buy, fix, sell. It’s about buying as cheaply as possible, adding value, and selling at a profit.

The two secrets of success in this type of operation are buying at the lowest price possible (and properties in poor condition usually have a greater negotiation margin) and keeping the costs and times of the renovations in check, so that your profit margin does not dwindle.

If you want to buy-to-let

If you are buying a house or an apartment with the intention of renting it out, the answer to the question of whether it is better to buy a renovated apartment or a fixer-upper is once again “it depends”.

Advantages of buying a fixer-upper:

In general, it is more profitable to buy something that needs quite a bit of work, because if you bought an equivalent, already renovated property you would be giving up part of the profit, and handing it over to the person who did the renovations. In other words, normally the total investment will be lower (and therefore the return higher) if you buy and renovate yourself than if you buy something already renovated.

Also, I usually warn my clients that not all renovations are the same. I tend to mistrust renovations done by “fix & flip” investors (buy-renovate-resell), because their profit is inversely proportional to the cost of the renovations, and therefore some tend to cut corners and save costs on things that are not visible to the naked eye but that can cause problems to the future owner down the line (installations, waterproofing…). This would be another point in favour of doing the renovations yourself – you control what’s being done and how!



Advantages of buying an already renovated apartment:

The main point in favour of buying something already renovated is that you get a faster return on your investment.

This is no trivial issue, because if you buy a fixer-upper and do the renovations yourself, you will be putting money and more money in it during an uncertain period of time without getting any profit out of it. So to the cost of the renovations themselves you have to add, during the weeks or months that the works last:

  • mortgage payments
  • community expenses
  • supplies
  • the cost opportunity cost (= what you could be earning if you invested elsewhere)

All in all, you have to take “surcharge” of buying a renovated apartment, subtract the non-obvious expenses and the opportunity cost mentioned above, and divide it by the number of years that you plan to maintain the investment. Perhaps you will be surprised by how small the difference is. With these numbers in mind, some investors decide that they prefer to buy a property that doesn’t need any work done and is ready to be rented out immediately. Or some even decide to buy a house or apartment that is already rented out and comes with a solid, well-paying tenant!

You might be thinking now: OK, but what about the problem you mentioned above, about not all renovations being equal and the need to be very vigilant with the qualities? Well, one possible solution is to buy something that has been renovated by a reputable company, one that comes with good references, such as the one that did the spectacular transformation you can see in the main image of this blog post:Dosplanos.

Conclusion: is it better to buy a fixer-upper or an already renovated apartment?

As we’ve seen throughout this post, it really depends. You have to bear in mind the funds or savings you have, the experience and time you have to actually undertake renovations yourself, and the use that you are going to give the house or apartment you buy. It’s a case-by-case assessment: do the numbers carefully, and if in doubt, get some advice form experts!


Shortly, I will post the details of the last purchase I have helped to make. My client, Maxime, is a very successful young professional who wanted to invest his savings in a rental apartment.

Did he buy a renovated apartment?

Or a fixer-upper?

Keep tuned to this blog and you will soon find out!


* Attention, there may be exceptions to this: in some cases banks can give a higher or lower LTV; some mortgages can finance a part of the cost of the renovations (for example, the “Suma” mortgage from UCI); and there are also some banks that will add some of the expenses to the mortgage as well. These are specific cases, and with very specific conditions, not available to everyone or in all cases, but they do exist.


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