Mapped: The Top States for Fixer-Upper Homes for Real Estate Investors in 2025

For real estate investors like us, finding value often means looking beyond the perfect, move-in-ready property. Sometimes, the real gems are the ones that need a little love – the fixer-uppers. A recent report from Realtor.com has mapped out the states where these opportunities are most abundant, offering a clear guide for where to find your next profitable project.

• Fixer-Upper Hotspots: Certain states offer a significantly higher percentage of homes needing renovation, presenting unique investment opportunities.

• Value Creation: These properties allow investors to add substantial value through strategic renovations, boosting equity and rental income.

• Regional Concentration: Many top states for fixer-uppers are concentrated in specific regions, indicating localized market conditions.

• Beyond Price: It’s not just about a lower purchase price; it’s about the potential for forced appreciation and increased cash flow post-renovation.

• Strategic Entry: Identifying these markets helps investors target areas where their renovation expertise can yield the highest returns.

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Unlocking Value – The Allure of Fixer-Uppers for Investors

In today’s housing market, finding a great deal can feel like searching for a needle in a haystack. That’s why many savvy real estate investors, myself included, are turning their attention to fixer-uppers. These properties, which require some renovation, offer a unique pathway to creating significant value and boosting your investment returns.

A recent report from Realtor.com highlights the states where these opportunities are most prevalent. It’s not just about a lower initial price; it’s about the potential to transform a neglected asset into a high-performing rental or a profitable flip. This strategy allows you to ‘force’ appreciation, rather than simply waiting for the market to do its thing.

Related: The 7 Best U.S. Real Estate Markets to Buy Rental Properties in 2025

Mapped – Top States for Fixer-Upper Opportunities

So, where should you be looking if you’re keen on the fixer-upper strategy? Realtor.com’s analysis points to several states where a substantial portion of listings are ripe for renovation. These are the places where your renovation skills and capital can truly make a difference.

Top 10 States with the Highest Percentage of Fixer-Upper Listings (June 2025)

Source: Realtor.com Data (Please verify and update this link to the specific original report if available).

Notice the concentration in the South and Midwest. These regions often combine more affordable median list prices with a higher prevalence of older housing stock, making them prime territories for renovation projects. This allows investors to acquire properties at a lower basis and add significant value.

Related: The Best U.S. Real Estate Markets for First Time Investors in 2025

The Flip Side – Risks and Challenges of Fixer-Uppers

While the allure of fixer-uppers is strong, it’s crucial to approach them with eyes wide open. These projects come with inherent risks that can quickly eat into your profits if not managed carefully. I’ve seen it happen, and trust me, you want to avoid those headaches.

Common Pitfalls to Watch Out For:

• Inaccurate Cost Estimates: Getting a precise renovation cost estimate can be incredibly tough. What looks like a simple cosmetic fix might hide structural issues, plumbing problems, or electrical nightmares. Initial bids often don’t account for these unknowns.

• Unexpected Major Repairs: This is the big one. You start tearing down a wall, and suddenly you find mold, termite damage, or a cracked foundation. These major, unforeseen repairs can derail your budget and timeline instantly.

• Cost Overruns: Even with a contingency, projects frequently go over budget. Material costs fluctuate, labor issues arise, and those unexpected repairs add up.

• Time Overruns: Every day a project runs late is a day you’re paying carrying costs (mortgage, taxes, insurance) without generating income. Delays can be caused by anything from contractor availability to permitting issues.

• Finding Reputable Contractors: This is perhaps the most critical and challenging aspect. An dishonest or incompetent contractor can turn your dream project into a financial disaster. Always do your homework!

• Managing Renovations from a Distance: If you’re investing out-of-state or out-of-country, managing a renovation remotely adds a layer of complexity. You need a trusted local team on the ground to oversee the work.

• Appraisal Risk: After all your hard work and investment, there’s a risk the property might not appraise as high as you hoped. This can impact your ability to refinance or sell for your desired profit.

Practical Tips to Mitigate Risks:

• Thorough Due Diligence: Before closing, get a comprehensive inspection by a qualified professional. Consider specialized inspections for plumbing, electrical, and foundation if concerns arise.

• Pad Your Budget: Always allocate a larger contingency fund than you think you’ll need—20% to 30% for older homes is a good rule of thumb.

• Vet Contractors Rigorously: Get multiple bids, check references extensively, review their past work, and ensure they are licensed and insured. Use clear contracts with detailed scopes of work and payment schedules tied to milestones.

• Local Presence (or Proxy): If investing remotely, establish a strong relationship with a trusted local project manager, property manager, or agent who can oversee the renovation process for you.

• Understand Your Market’s ARV: Before you buy, know what similar, renovated properties are selling for in that specific neighbourhood. Don’t over-renovate for the area.

As Hannah Jones, Senior Economic Analyst at Realtor.com, points out, “Fixer-uppers represent a unique opportunity for buyers to gain equity through sweat equity and strategic renovations. In markets where inventory is tight and prices are high, these homes can be a more accessible entry point, especially for investors looking to add value.” While she highlights the opportunity, remember that “sweat equity” comes with its own set of challenges.

If the risks of managing a full renovation seem too daunting, remember that a lower-risk option exists: buying turnkey rental properties from reputable providers. These properties have already been renovated to a high standard, often come with tenants in place, and are managed by professional property management, allowing you to focus on portfolio growth without the renovation headaches.

Related: Investing in Cleveland Real Estate: Essential Guide for Rental Property Investors

Conclusion: Building Wealth, One Renovation at a Time, or Buying Turnkey

The data clearly shows that fixer-uppers are a significant segment of the U.S. housing market, particularly in certain states. For real estate investors, this isn’t just a trend; it’s a viable and often highly profitable investment strategy. However, it’s one that demands careful planning and risk mitigation.

By targeting these states and approaching each project with meticulous planning, a clear understanding of renovation ROI, and a robust risk management strategy, you can unlock substantial equity and generate strong cash flow. Don’t shy away from a property that needs work; embrace it as an opportunity to build wealth and expand your portfolio, or consider the streamlined path of turnkey properties for a potentially smoother investment journey.

Previous Article: 30 Cities Where Housing Inventory is Still Tight in 2025

❓ Frequently Asked Questions

What is a ‘fixer-upper’ in the context of real estate investment?

A ‘fixer-upper’ is a property that requires significant repairs, renovations, or updates. For real estate investors, these homes often come at a lower initial purchase price, offering the potential to increase value through strategic improvements.

Why should real estate investors consider buying fixer-uppers?

Fixer-uppers allow investors to create ‘forced appreciation’ by adding value through renovations, rather than waiting for market appreciation. This can lead to higher rental income, better resale value, and stronger equity gains, especially in competitive markets.

Which regions are best for finding fixer-upper investment opportunities?

According to Realtor.com, states like West Virginia, Ohio, Indiana, New York, and Michigan have a high percentage of fixer-upper listings, indicating strong opportunities in the Midwest and Northeast for renovation-focused investors.

What are the common risks when investing in fixer-uppers?

Common risks include inaccurate cost estimates, unexpected major repairs, cost and time overruns, difficulty finding reputable contractors, challenges with remote management, and the risk of the property not appraising as high as expected after renovation.

How can investors maximize returns on fixer-upper properties?

To maximize returns, investors should focus on thorough due diligence, accurate budgeting with contingency, strategic renovations with high ROI, rigorous contractor vetting, and understanding local market comparables. Alternatively, turnkey properties offer a lower-risk entry.