‘My First Home Was a $185K Fixer-Upper in Florida—Now It’s Bringing in Passive Income’

Younger Americans eager to become homeowners are turning to investing their money and hard work into fixer-uppers to make that dream a reality.

In the start of 2025, homeownership rates fell to 65.1%—the lowest since before the COVID-19 pandemic, with affordability and mortgage rates holding buyers back.

At least 3 in 5 Americans are willing to buy a home that needs some kind of renovation, according to BMO’s Real Financial Progress Index. This includes 63% of Gen Z and 65% of millennials and Gen X. The exception is boomers, with only 37% willing to spend their retirement years fixing up a new home.

The report explains that younger-generation renters whose earning, investing, and homebuying prospects were affected by the Great Recession of 2008 and the pandemic are most likely to feel this way, with 67% of millennials and 63% of Gen Z “envious” of peers who do own homes.

Austin Hair, a former professional wakeboarder, wanted to buy his first home in 2011. At the time, the real estate market in Florida was “at its lowest following the 2008 crash,” and prices were heavily discounted.

Still, the millennial didn’t want to blow his savings on a move-in ready home. Instead, he took a chance by purchasing a $185,000 fixer-upper on a lake in Orlando.

“The place was in rough shape, but that’s what made it affordable,” Hair, the founder and CEO at Eperon Capital, tells Realtor.com®. “Renovating the home took about a year, and while it was a significant amount of work, the sweat equity I built up laid the foundation for future investing.”

Younger Americans face financial hurdles

“The financial hurdles to owning a home have rarely been higher, especially for young households that don’t yet have their foot in the door,” says Scott Anderson, chief U.S. economist at BMO.

The report reveals that 61% of those surveyed feel less confident they’ll own a home in their lifetime than they did five years ago.

On the other hand, the “idea” of homeownership remains strong: 71% of millennials and 69% of Gen Z report owning a home is a significant life aspiration. Meanwhile, 54% of American renters feel “envious of those their age and younger who have purchased a home.”

Austin says he saved well over $50,000 upfront by opting to do the renovations himself on his four-bedroom home with a guesthouse, pool, and hot tub.

Eventually, he moved out but he didn’t sell. Instead, he kept his first home as an investment and rented out the rooms initially.

“By renovating the property myself and renting out rooms, I was cash-flowing $1,200 a month even after the mortgage and utilities,” says Hair, who now uses the home as a short-term rental.

Young buyers want conditions to be ‘just right’

It appears young, potential buyers have a vision, and the report explains they want conditions to be “just right.”

The right rate: 69% of Gen Z renters and 74% of millennial renters who plan to buy a home are waiting for interest rates to drop.

The right size: Young Americans are wary of a “starter home.” Gen Z (61%) renters and millennial (61%) renters agree that buying a starter home and upgrading to a bigger one a few years later “doesn’t make any sense.”

The right time: 57% of non-homeowners with children say that saving for education or child care takes financial priority over buying a home. Other big financial commitments that younger, non-homeowners prioritize over purchasing a house include buying a car (50%), and 54% of millennials want to save for retirement.

“The data show that owning a home remains a key component of the American dream, but with some obstacles still facing first-time homebuyers, younger generations worry they missed their moment,” says Paul Dilda, head of U.S. consumer strategy at BMO.

For Gen Z and millennials who have achieved their dream of homeownership, the report reveals they are more dependent on family, such as Mom and Dad. Gen Z (60%) and 57% of millennials say they could not have purchased a home without the monetary help from their families.

“Poor housing affordability, limited inventory of existing homes, and rising interest rates make finding the right home that fits your budget a challenging endeavor,” says Anderson.

Younger Americans admit they’re more likely to “co-buy” a home with friends, family, or other people that they have no romantic relationships with.

“I would advise people who want to do a fixer-upper to get a lot of bids for every job, gather as much info as you can,” advises Hair.

“Bonus, if you do research before the contractors show up, you will seem much smarter and they are less likely to take advantage. After that, you can probably figure out how to do a lot of the jobs yourself and save some money.”