The Big Move: I’m almost 50 and I want to buy a house that needs some major repairs. Is it worth it?

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‘The Big Move’ is a MarketWatch column looking at the ins and outs of real estate, from navigating the search for a new home to applying for a mortgage.

Do you have a question about buying or selling a home? Do you want to know where your next move should be? Email Jacob Passy at TheBigMove@marketwatch.com.

Dear MarketWatch,

I want to buy a home that needs a lot of repairs and renovations, but I’m almost 50 years old. Is it worth it? How long does it take for home improvements to pay off?

Sincerely,

Fixed on a Fixer-Upper

Dear Fixed,

If you watch a lot of shows on HGTV, the idea of buying a home in need of some TLC for a bargain and sprucing it up sure can sound appealing. Many among us fantasize about embracing their inner interior designer, taking a rundown home and giving it the Chip and Joanna Gaines treatment. In the interest of honesty, I’ll admit that I’m guilty of such day dreams.

I can say with a fair degree of confidence that you already have the right instincts here. There are plenty of reasons to be skeptical about taking on such a huge project. The biggest one: They don’t usually pay off.

Smaller-scale home-improvement projects might have a better return on investment. For instance, a can of paint or two costs hardly anything, and research shows that painting the rooms in your house the right color can add as much as $ 3,000 to the home’s sale price.

With anything bigger than that, you’re unlikely to recoup your investment. Remodeling Magazine each year puts out a list of the home upgrades that fetch the biggest returns. The 2020 edition of this report showed that on average not a single home-improvement project sees a 100% return. The closest you could come — adding a manufactured stone veneer to your house — was a 96% return on average. And in most cases, the returns on renovations had fallen between 2019 and 2020.

Americans generally view owning a home as a financial investment — and the four-bedroom home with a white-picket fence surely factors in the American Dream. Many people go into homeownership hoping to see their equity grow over time — with the goal of passing that money onto their children or using it as a cushion in retirement. But when you compare real estate to other assets, it’s clear that owning real estate is more complicated than that.

“Many financial investments will grow as fast, or faster, than personal real estate and be far more flexible if you need any access to liquidity along the way,” said Sean Pearson, a Pennsylvania-based financial adviser and associate vice president with Ameriprise Financial Services. “If you live in your house long enough, and you sell during certain types of markets, depending on interest rates, you might see a positive ROI from your home. But that could be a long way from now, and requires a lot of things to happen along the way.”

More from The Big Move: I found an old lien on my home from a past refinance. How do I get rid of it?

Instead of approaching buying a home with an investor’s mindset, I suggest you consider the myriad other reasons why homeownership can be beneficial. Owning a home allows you to take control over your housing costs. Sure, the property tax bill or utility rates may vary over time, but you won’t need to worry about a landlord jacking up the rent unexpectedly. And the equity in your home — if used appropriately — can become a useful financial tool to consolidate other debts or finance a child’s college education. (Again, approach cashing out home equity with caution.)

You’re almost 50 — and maybe a decade or so away from retirement. Think about whether this home could be your forever home. If you’re making major renovations, you could really ensure that this home would be one you could live in for the rest of your days by approaching those repairs with accessibility in mind. If you can afford major home improvements, and they’ll enrich your quality of life, it’s hard to put a price tag on that.

Or you might decide that owning a home isn’t worth it. There is a benefit, after all, to being able to rely on a landlord or property manager to handle upkeep. And in many parts of the country, renting a home and using your remaining money wisely could be a better deal that becoming a homeowner.

Whatever path you choose to take, I encourage you to keep trusting your gut. It’s not led you astray so far.