Should You Invest In a Fixer-Upper or a Turnkey Property?

Wondering whether to invest in a fixer-upper or a turnkey rental in 2025? This guide breaks down the pros, cons, and ROI of both strategies — with real UK data and expert insight

One of the biggest questions investors face is whether to buy a fixer-upper - a property that needs work but promises higher returns - or a turnkey home that’s ready to rent out straight away. Both routes can make sense, but which one’s right for you in the 2025 UK market depends on your goals, budget and appetite for hassle.

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The state of play in 2025

The UK market is relatively steady after years of ups and downs. Average house prices are around £270,000 (UK HPI, mid-2025), showing modest annual growth of roughly 2–3%, while rents have continued to rise, up about 2–4% year-on-year across most regions (ONS, 2025). It is important to note that these are UK-wide changes, with Northern Regions pulling the metric up with higher percentages, while Southern UK is dragging the averages down.

For investors, that means capital growth is potentially a little slower but more predictable - putting the spotlight back on buying well and managing efficiently. Whether you chase a renovation or a ready-to-go property, the key is value and ROI, not speculation.

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What is a fixer-upper?

A fixer-upper is a property sold for a lower price because it needs cosmetic or structural work. It might have dated interiors, worn roofs or older heating systems, but offers an opportunity to add value through refurbishment.

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Pros of a fixer-upper

1. Potentially higher returns
   You can buy cheaper, add value and refinance or sell for a profit. Many “buy, refurbish, refinance” (BRR) investors use this model to recycle capital into multiple projects.
2. Control over finish and spec
   You choose the layout, finish and level of refurbishment to suit your tenant type - for example, modernising kitchens and bathrooms to appeal to young professionals or families.
3. Opportunity to build equity fast
   A well-managed refurb can create equity immediately rather than waiting for natural appreciation.
4. Better choice of deals
   Novice investors and less experienced sourcers shy away from big projects, leaving less competition and better margins for the savvy. Remember – successful investors don’t avoid risk, they learn to manage risk (Robert Kyosaki said this in “Rich Dad Poor Dad” and political controversy aside that is an extremely powerful statement and a great book).

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Cons of a fixer-upper

1. Higher upfront effort and cost
   Renovation costs rose significantly in recent years. The Office for National Statistics’ construction materials index still shows costs around 25–30% higher than pre-2020 averages. You need solid quotes, contingencies and trades lined up.
2. Uncertain timelines
   Refurbishment rarely goes perfectly. Delays add holding costs and stress. Contingencies on both are a Non-negotiable.
3. Finance challenges
   Many lenders won’t fund properties deemed “uninhabitable”, meaning you might need bridging finance or cash until the works are done.

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When a fixer-upper makes sense

• You have cash reserves or bridging finance and time to manage or oversee the refurb.
• You’ve got reliable contractors and local knowledge.
• You’re aiming for BRR or value-add capital growth, not just immediate rental yield.
• You’re comfortable with moderate risk for higher upside.

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What is a turnkey property?

A turnkey property is ready to let or live in from day one - typically already refurbished, furnished and compliant. Many sourcing companies focus on finding turnkey investments for busy professionals who want hassle-free income.

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Pros of a turnkey property

1. Instant income
   You can market or let immediately, meaning faster returns and no void period for works.
2. Simpler financing
   Mainstream buy-to-let lenders are happy to fund properties in good condition, often at better rates than bridge loans.
3. Lower stress & less uncertainty
   You skip the unpredictability of renovation timelines, trades and cost inflation.

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Cons of a turnkey property

1. Higher purchase price
   You’re paying for convenience. Some turnkey deals are priced with profit already baked in for the refurbisher.
2. Limited value-add opportunity
   You’ll rely more on natural capital growth or operational improvements (e.g. better management, rent reviews).
3. Harder to find true deals and save capital
   Competition for turnkey homes is fierce - especially in strong rental markets like Manchester, Leeds and Liverpool. You are also usually competing with owner-occupier buyers, who are often prepared to pay “over the odds” for a property that “feels like a home”.

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When a turnkey makes sense

• You want passive income quickly.
• You’re investing remotely and don’t have the time or contacts to manage refurb works.
• You can afford to leave more money in the deal for the long-termYou prefer predictable returns over chasing maximum equity uplift.

Cost comparison example (illustrative, assuming same property)

In this simplified example, the fixer-upper edges ahead on yield - but the turnkey wins on speed, certainty and liquidity (if bought at the right price). The “better” deal depends on your cashflow needs, time horizon, overall long-term goals and tolerance for risk.

What the 2025 market means for both routes

Renovation still creates opportunity, but the days of easy uplift are long-over. Materials and labour remain expensive, and valuations are conservative. That makes accurate deal analysis and sourcing essential.

Meanwhile, turnkey properties are gaining popularity with time-poor investors seeking stability. With rental demand up around 2–4% across most regions and house prices steady, a well-chosen turnkey can deliver reliable income with initial risk.

For investors looking north - Greater Manchester, Merseyside, parts of Lancashire and Yorkshire - both routes offer good fundamentals: solid employment bases, infrastructure growth and affordable entry prices. It is also important to note – well selected properties from both strategies will equalize over the long term, so if your plans are to build a long-term property portfolio, neither route is “the one to go down”, just remember that good decision-making, and a specialist power team is imperative, whichever strategy you choose!

At Donelan Property, we work across both strategies - sourcing renovation opportunities for investors who want to add value, and turnkey homes for those who want a ready-made income stream. Same due diligence  goes into finding both types of deals, and we’ve got our own building/maintenance company and a letting agent/property manager to make both strategies easy to navigate and hands-off, whatever your level of investment knowledge, time available, or location is!

If you’re weighing up which route suits your goals, we can help you analyse the numbers, compare risk and find the right fit. Just let us know here.

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