%20--%3e%3cg%3e%3cg%20id='Logotype'%3e%3cg%3e%3cpath%20fill='%23141313'%20d='M46.37,250.9L136.63,28.98H0v237.25C0,296.87,21.93,318.83,52.56,318.83v-.03h160.64v-154.45l-156.9,95.23c-5.8,3.71-12.82-2.05-9.94-8.68Z'/%3e%3cpath%20fill='%23141313'%20d='M347.35,104.3c-68.33,0-115.93,44.71-115.93,108.91s47.6,108.9,115.93,108.9,115.93-44.72,115.93-108.9-47.6-108.91-115.93-108.91ZM347.35,255.04c-24.41,0-42.23-17.39-42.23-41.8s17.79-41.83,42.23-41.83,42.23,17.39,42.23,41.83-17.79,41.8-42.23,41.8Z'/%3e%3cpath%20fill='%23141313'%20d='M633.86,118.01c0,3.31-3.71,3.31-7.02,1.66-18.22-9.54-32.29-15.3-53-15.3-56.71,0-95.62,42.66-95.62,108.08s39.32,109.7,93.14,109.7v-.03c21.93,0,35.61-7.02,56.31-19.87,3.71-2.48,8.28-1.66,6.19,3.71l-5.36,12.85h86.51V28.98h-81.15v89.03ZM594.11,255.04c-24.41,0-42.23-17.39-42.23-41.8s17.79-41.83,42.23-41.83,42.23,17.39,42.23,41.83-17.79,41.8-42.23,41.8Z'/%3e%3cpath%20fill='%23141313'%20d='M1406.03,107.65l-23.58,112.61c-1.66,8.68-11.59,9.11-13.65-.4l-24.84-112.22h-94.79c-39.32,0-51.74-11.99-51.74-29.81s10.33-28.15,27.72-28.15c20.27,0,30.64,16.16,32.69,32.29h79.5C1325.35,29.38,1286.43,0,1230.52,0,1168.85,0,1130.32,36.04,1130.32,91.09v16.56h-44.71v67.07h44.71v144.08h81.15v-143.68h70.23l46.53,124.21c3.31,8.28,2.88,17.39-.4,26.1l-28.55,68.73h80.25l120.47-286.51h-93.97Z'/%3e%3cpath%20fill='%23141313'%20d='M886.41,117.98c0,3.31-3.71,3.31-7.02,1.66-19.87-9.94-34.35-15.3-54.65-15.3-60.45,0-93.97,49.29-93.97,107.65,0,64.59,37.26,98.54,87.77,98.54,23.19,0,40.57-7.02,62.1-19.47,5.37-3.31,9.51-.4,7.45,4.57-9.11,20.7-28.55,31.47-59.62,31.47h-83.2v67.07h98.5c72.04,0,123.78-47.63,123.78-114.67V107.65h-81.15v10.33ZM846.67,255.04c-24.41,0-42.23-17.39-42.23-41.8s17.79-41.83,42.23-41.83,42.23,17.39,42.23,41.83-17.79,41.8-42.23,41.8Z'/%3e%3cpath%20fill='%23141313'%20d='M1026.35,18.18c-26.1,0-44.71,16.16-44.71,39.35s18.61,39.35,44.71,39.35,44.72-16.16,44.72-39.35-18.62-39.35-44.72-39.35Z'/%3e%3crect%20fill='%23141313'%20x='985.78'%20y='107.65'%20width='81.15'%20height='211.15'/%3e%3c/g%3e%3c/g%3e%3c/g%3e%3c/svg%3e)
What are Fixer-Uppers?
In the vacation rental industry, a fixer-upper is a property needing substantial repairs, cosmetic updates, or structural changes to become a habitable and appealing short-term rental. Investors purchase these properties at a lower price point, anticipating that the renovation costs plus the purchase price will be less than the market value of a comparable, move-in-ready property.
The primary goal is to build equity and generate rental income or achieve a higher resale price.
Join the Lodgify newsletter
How it works
An investor first identifies a property with good potential in a desirable rental market, often one that is structurally sound but cosmetically outdated or in disrepair. After the purchase, they undertake renovations, which can range from simple updates like painting to major overhauls such as kitchen remodels or structural additions.
The work may be performed by the investor to build 'sweat equity' or by hiring professional contractors. Once the renovation is complete, the property is furnished, photographed, and listed as a vacation rental.
Why it matters
Fixer-uppers can offer a strategic entry point into desirable, high-cost rental markets by allowing investors to purchase a property below the average market rate. This strategy can result in higher equity and potentially greater ROI compared to buying a turnkey property.
Renovating a property also allows owners to customize the layout, design, and amenities specifically for their target guest, creating a unique and highly marketable vacation rental that can command higher rates and occupancy.
Examples
- An investor buys an outdated 1970s cabin near a national park for a low price, completely modernizes the interior, adds a hot tub, and markets it as a retro-chic mountain getaway.
- A couple purchases a small, neglected beachfront cottage, performs extensive storm-proofing and cosmetic renovations, and re-lists it as a premium honeymoon suite with direct beach access.
- A property manager acquires a foreclosed home with a dated kitchen and bathrooms in a popular tourist city, renovates these key areas, and turns it into a high-end urban rental for business and leisure travelers.
- An entrepreneur buys a large, dilapidated farmhouse, converting the main house into a rental while planning future conversions for the outbuildings to create a multi-property vacation complex.
Frequently asked questions
What is 'sweat equity' in the context of a fixer-upper?+
Are fixer-uppers a good investment for first-time vacation rental owners?+
How do I estimate the cost of renovating a fixer-upper?+
Related terms
Capital Expenditure (CapEx)
Capital Expenditure (CapEx) refers to significant funds used to acquire, upgrade, or maintain long-term physical assets for a vacation rental property, such as…
Return on Investment (ROI)
Return on Investment (ROI) is a key performance indicator used in the vacation rental industry to measure the profitability of an investment relative to its…
Sweat Equity
Sweat equity refers to the increase in a property's value resulting from the direct, unpaid labor of its owner, rather than paying for professional services.
TurnKey Vacation Rentals
TurnKey Vacation Rentals was a full-service, technology-enabled vacation rental management company that provided homeowners with a hands-off approach to…