Everyone likes the idea of a fixer-upper. That is, until you're actually fixing it. Nothing has the potential to destroy a marriage quicker than a huge fix-up project, other than maybe Monopoly. But obviously given the right set of circumstances, they can make a lot of sense. Let's examine some of those.
1) Well, they're real cheap, aren't they? Usually they are priced very very low in accordance with all the fixups required. The National Association of Homebuilders, says people shopping for a fixer-upper can expect to spend 20% to 25% less than what they'd have to shell out for comparable homes that are move-in ready. Homes with serious issues—such as with the foundation, termites, or flooding—should command an even deeper discount. It's up to you to decide if you can do it in a way to offset that 25% savings you initially receive, and not go over it.
All that said, keep in mind that fixer-uppers will require that you spend more money on renovations. So make sure to have a contractor walk through the house and estimate what these repairs will run so you have a good handle on the full cost. They also suggest you pad your renovation budget by at least 5% to cover any surprises. Rest assured, stuff will pop up you didn't foresee.
2) If your dream is to live in a home where everything is done precisely to your taste, then a fixer-upper is a great fit. It's obviously not as customizable as building your own, but it of course does allow you a great deal of freedom to Pinterest your house.
3) You love a home with history and character. Those new custom builds do afford you more freedom with the structure of the house but they don't have that sense of history so many people love.
4) Probably the most important one if you want to actually save money - be DIY savvy. Some of the renovations you can hire you, but to actually record significant savings, you'll have to do some of the less tricky work on your own. If you can do that, things like backsplashes, flooring, framing...you're laughing. This leads us to the next one.
5) You want to flip a house for profit. Again, this isn't easily achieved without doing a lot of the main stuff yourself, but if you can do it without sacrificing quality, there's a good chance you can turn a healthy profit. Just make sure to calculate how much time this will take - your time is worth something too, and people tend to forget that.
6) It's an adventure! There will probably be a lot of peaks and valleys, but if you're into the pursuit of a fixer upper because you aren't the Netflix type and you like staying busy, you might be a good candidate for a fixer upper!