If there’s one lesson I’ve learned the hard way in real estate, it’s that a full-on, gut-remodel can be a nightmare. After years of painful, unpredictable remodeling projects, I can confidently say: I will never do a complete remodel again.

Instead, I now favor purchasing a fully remodeled, move-in ready home for any future investments. Not only do you save an enormous amount of time and money, but you also gain immeasurable mental peace by avoiding contractor disputes, delays, cost overruns, and the stress that inevitably spills over into your personal life. From a profitability standpoint, I’ve also noticed it’s getting cheaper to buy a fully remodeled home as well. This won’t last.

For background, I’ve remodeled two homes down to the studs and even built a bathroom out of a closet—complete with permits—in another home. I’ve also constructed two decks and installed a hot tub with permits on a custom platform. On top of that, I’ve purchased two fully remodeled, move-in ready homes, giving me a well-rounded perspective and deep understanding of the entire process.

I’m confident that in more than 75% of cases, buying a fully remodeled home today offers better value and greater homeownership satisfaction. Let’s discuss why.

The Hidden Costs of a Fixer-Upper

When you buy a fixer-upper, you’re not just paying for the property’s square footage—you’re also betting on your ability to manage a long, drawn-out remodeling process. I’ve been there. I’ve taken on projects that involved tearing down walls, reconfiguring spaces, building something from nothing, all while juggling permits and the chaos of coordinating contractors.

Sure, there’s the allure of sweat equity, but once you factor in unexpected cost overruns, endless delays, and the inevitable headaches with unreliable contractors, any potential profit evaporates.

Cost And Margins Have Changed

A decade ago in San Francisco, you could remodel for just $250–$500 per square foot, while the average selling price was around $700–$900 per square foot. That meant there was a strong likelihood your remodel would be a sound investment—especially if you were focused on expanding your livable space.

Fast forward to today, and the landscape has shifted dramatically. Remodeling now costs between $500 and $1,500 per square foot, while the average selling price hovers between $900 and $1,200 per square foot. In other words, the cost of remodeling has increased at a much faster rate than the price of properties. This narrower margin makes it much harder to turn a profit on a remodel – it’s like playing Russian Roulette!

One unexpected cost overrun, a permitting snafu, or an unreliable contractor who disappears for three months can quickly blow your budget.

Since 2020, I’ve witnessed this scenario play out with increasing frequency. While the specific cost to remodel can vary by city, the overall trend is undeniable: inflation and more savvy contractors are squeezing profit margins and diminishing returns on remodeling projects.

Underestimating the True Cost of Remodeling

Homeowners often underestimate the true cost of remodeling. It’s similar to how many Uber drivers miscalculate their true expenses—there’s always a hidden cost that you don’t see until you’re deep in the process, such as a car accident wiping away months of profits.

Every homeowner before remodeling begins feels hopeful their project will be a success. But they are misguided because too many things are outside of their control.

Let’s break it down:

1. Permitting Delays

Once you decide to change something about your home, the local building department may require you to update everything to meet the latest codes. These updates can change so fast that even experience contractors can’t keep up and we “learn on your job” to figure it out.

A permit that used to be issued in a couple of month can now take six months or longer. If your contractor isn’t on top of these requirements, your project can face serious delays, forcing you to extend the timeline and pay more in temporary living expenses.

2. Escalating Construction Cost

Your contractor’s initial bid is often the lowest possible to get your business. Once you start tearing down walls, you’re at their mercy. Every additional project or “suggested” improvement increases the cost, and before you know it, you’re signing change orders that push your budget way beyond what you planned. Materials are more expensive, labor is scarce, and every day the project drags on adds to the overall expense.

Even if you include a contract clause rewarding your contractor for timely completion, they may still struggle to meet deadlines. And if you add a penalty for delays, actually collecting on it will likely be a challenge. Remember, they are holding you hostage if you want to get your job done.

3. The Last Mile: Getting The Permits Actually Approved

The sloppier your contractor and sub-contractors are, the harder it becomes to get through the permitting process. You need to pass inspections from the building, plumbing, and electrical inspectors—each at different stages. If one inspector flags an issue, the entire process is delayed, and you might even face conflicting demands from two different inspectors from the same field.

Meanwhile, you’re entirely at the mercy of your contractors to resolve these issues. If someone is out sick or simply doesn’t know what to do, the delays only multiply.

If you’re unlucky—as most remodelers often are—you’ll experience a maddening chain reaction of delays. This can lead to mounting anxiety and even erupt into major conflicts at home after investing so much money and time into the project. You’re so close to the finish line, yet one inspector’s objection can halt everything, leaving you frustrated and stressed.

The reality is that no matter how well you plan, too many variables remain outside your control. I’m highly proactive and have plenty of time to manage contractors since I don’t have a traditional day job. Yet, even with careful oversight, none of my projects have finished without at least a 20% delay or exceeding 120% of the budget. There is always something that comes up.

Your Time and Sanity Are Priceless

If you’re an office worker or entrepreneur, you’re used to efficient processes—deadlines, reviews, and coordinated efforts where everyone shares the same goal. After all, you’re colleagues. There’s a standard protocol in place that you’re used to.

With a remodel, however, you’re dealing with a disparate group of individuals with different work styles. Some might not even have your best interests at heart. Your contractor might be juggling multiple projects, meaning your home is just one of many. The result? Your remodel may never be their top priority, especially if another project is more lucrative.

Imagine spending two years on a gut remodel, only to break even. You’ve not only invested money that could have earned a return but also countless hours that could have been spent on earning more at your job or building your side business. Then there is spending time with your family. As your kids grow up and your opportunities to be present become fewer, that time is irreplaceable.

I’ve spoken to many homeowners who regret undertaking major remodels—not just for the financial cost, but for the toll it takes on their personal lives. In some cases, the strain has even led to divorces, where the cost of ending a relationship far outweighs any financial gains from the remodel.

A Better Way: Buying Fully Remodeled, Move-In Ready Homes

Contrast the chaos of a fixer-upper with the simple, straightforward approach of buying a fully remodeled, move-in ready home. The benefits are enormous:

• Time Savings: You don’t have to wait months or years for your dream home to be ready. Move in and start living your life immediately.
• Cost Predictability: When you buy a fully remodeled home, you know exactly what you’re paying for—no hidden costs, no unexpected delays, no contractor drama.
• Mental Peace: Avoid the stress of coordinating with contractors, navigating permitting hurdles, and managing a lengthy, uncertain project timeline. You get peace of mind knowing your home is ready to go.
• Family Harmony: A smooth move-in process means less stress at home, which helps maintain a positive atmosphere for you and your loved ones. Avoid the frustration that can lead to family strife, and focus on what truly matters.
• Immediate Enjoyment: There’s nothing like the instant gratification of stepping into a beautifully renovated home. You can immediately start enjoying your space, customizing it with your own touches, and creating lasting memories.

The physical and emotional toll of a remodel is not worth the potential financial upside. It is way too stressful dealing with so many people. The last two homes I’ve purchased have been turnkey, which I fully appreciate, like my Toto washlets. Yes, fully remodeled homes still aren’t perfect. But the ability to fix issues is much more manageable.

Don’t Be So Picky Already

After a USTA tennis match, I caught up with an acquaintance who once helped a friend buy a home. He’s one of those top 0.1% agents, typically selling homes well over $5 million.

We got onto the topic of remodeling, and he summed it up perfectly: “It’s nuts right now. You can buy a fully remodeled home for less than a fixer-upper plus all the remodeling once it’s done. Some really rich people have very peculiar tastes and are willing to pay anything for a home that fits their fancy.”

The takeaway? The less picky you are, the more money you save when buying a house. If your tastes are too eclectic, your property might not appeal to future buyers—and that can limit your resale value.

If a remodeled home has a great layout and solid bones, I’d much rather buy it than take on a fixer-upper that needs tons of work. Changing the aesthetics of a home is easy, doing a gut remodel is hard.

Buy a Remodeled Property If the Following Apply

• You’re over 40 and have children. If you’re at a stage in life where stability and time with your family matter most, a move-in ready home is the smart choice.
• Your marriage is already on the rocks. Avoid the extra stress of a lengthy remodel when your personal life needs more stability.
• Managing two properties strains your cash flow. If juggling multiple properties is stretching your finances, a remodeled home can simplify your life.
• You hate feeling taken advantage of. When you prefer certainty over unexpected remodeling costs and contractor surprises.
• You’re not handy with building, plumbing, or electrical work. If DIY isn’t your forte, leave the remodeling to professionals and enjoy a home that’s ready from day one.
• You value peace and harmony over endless customization and potential profits. For those who prioritize stress-free living and immediate enjoyment over the ups and downs of a fixer-upper.
• You have a job and other interests you’d rather pursue. If your time is better spent on your career or passions rather than managing a home renovation.
• You’re a personal finance enthusiast who appreciates the time value of money. A remodeled home saves you time and energy, allowing you to focus on investments that grow your wealth.
• You have investments equal to the Minimum Threshold Amount, where work becomes more optional. With such wealth, your time becomes even more valuable.

Buy a Fixer-Upper If the Following Apply

• You’re under 35 and earn a median income or less. If you’re under 35, you likely have the time and energy to devote to a remodel. Ages 35–40 can be a gray zone, due to lifestyle demands.
• You don’t have children or they’ve left the house already. If you don’t have children, or your kids are independent and don’t need you around all the time, you’ll have more freedom to invest in the time-intensive remodeling process.
• You have insider connections. Having connections in the Department of Building that can help expedite permits is a major advantage. If you know someone who can smooth the permitting process, it can save you significant time and headache.
• You have expert knowledge. If you’re a contractor or have intimate knowledge of building, electrical, and plumbing codes, you can better manage the remodel, troubleshoot issues before they balloon, and potentially even cut costs.
• You have a reliable contractor. Knowing a reliable contractor who offers affordable rates is essential. A trustworthy team can make the difference between a successful project and a nightmare.
• You have remodeling experience. Given you know what to expect, you should suffer less.
• You love the process. If you love the process of remodeling and building—from design to execution—you might find the experience rewarding in itself. You’ve got the sweat equity mindset.
• You have the financial cushion. Having a financial buffer to absorb unexpected delays, cost overruns, or contractor issues is crucial.

Turnkey Properties For The Win

Save your money—and your sanity—by opting for a fully remodeled, move-in ready home. You can always personalize it later with new paint, fixtures, appliances, and landscaping. That’s easy.

Even if you could profit from remodeling an old home, it would not be enough to make up for the duress and constant surprises along the way. Trust me, as someone who’s managed multiple remodels without a day job, I can tell you there are simply too many variables beyond your control.

Let’s just hope that before you submit an offer, not every homebuyer fully realizes what we already know—so they don’t end up bidding up move-in ready properties to huge premiums. Enjoy your fully remodeled home!

Experienced homeowners, have you found that fully remodeled homes offer better value? Do you think misplaced hope plays a big role in why some buyers still go for fixer-uppers in hopes of a big profit? I’d love to hear about your own remodeling experiences!

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If you want to invest in real estate without the headache of remodeling, check out Fundrise—my favorite private real estate platform. Fundrise focuses on high-quality residential and industrial commercial properties in the Sunbelt, where valuations are lower and yields are higher.

Some commercial real estate valuations have dropped to levels near the 2008 financial crisis lows, despite a much stronger economy and healthier household balance sheets. Seeing this as an opportunity, I’m dollar-cost averaging into the sector at lower prices. Fundrise, a long-time sponsor of Financial Samurai, has been part of my strategy—I’ve invested over $300,000 with them so far.

To expedite your journey to financial freedom, join over 60,000 others and subscribe to the free Financial Samurai newsletter. Financial Samurai is among the largest independently-owned personal finance websites, established in 2009. I write from experience and expertise.