I am engaged and house shopping, I need some advice I am looking to spend 40k on a fixer upper. I just figured if I have the money buy instead of rent an apartment I can get money back.
I would go higher on price if by chance I could lease purchase and sell the house when I am done with it and get a return.
If you can buy a run-down place in a nice neighbourhood you may be able to get yourself an awesome deal. Be aware of a few things that many people overlook:
Firstly, make sure your bride-to-be is happy with what you're doing. She might be thrilled to end up living in a neighbourhood you "shouldn't" be able to afford, then again she might not be thrilled at the fixing up work.
Make sure you factor in the cost of fixing up the place, and leave yourself a decent amount for contingencies. A couple who live near me bought the place knowing it needed work, they just didn't realise how much work. When they took down the ceiling in the kitchen they realised the joists above it were rotting and needed to be replaced, but by then they had run out of money. So they lived in a building site for several weeks while they did the work themselves, while both held down full time jobs. Be sure your relationship will stand up to that kind of stress.
Also make sure you factor in the general stress and hassle of fixing a place up. I know another couple who bought a place that was practically falling down so they could live in an exclusive area. For several weeks before going to bed they had to clear rubble so they could set a mattress down to sleep on it, and they washed dishes in the bath for several weeks while the kitchen was gutted and rebuilt. Regardless of whether you can afford the work, be sure you're willing to deal with the disruption.
Depending on where you live, also make sure that fixing up a run down place in a nice area isn't going to push property taxes higher than you can afford. It would be a shame to deal with the costs and stresses of fixing a place up only to find you can't afford to keep it. In the current economic climate selling a house because you can't afford the property taxes isn't the way to get a good price for it.
Finally, before you buy at all be sure you're happy to live in the area for a while. Although rent often seems like dead money in that you hand it over and get nothing permanent for it, it's no more dead than the interest you'll pay on a mortgage and renting usually gives you much more flexibility to move than owning.