Should I Buy A House That Needs Renovating?
It’s a question as old as the first civilisation, and yet – even in this new millennium – we’re no closer to a one-size-fits-all, definitive answer. For every person with the Midas touch, the luck and the know-how to turn a ruin into a beautiful and valuable home, there’s another who’s ended up with a money-pit that sends them to the brink of bankruptcy or beyond. However, there are things you can do to make it more likely that you end up in the former rather than the latter category. While it’s impossible to say, ‘Yes – you should definitely snap up that dilapidated property’, with the right kind of forethought, there’s no reason why it can’t turn out to be a good move. Here’s our Master Removers guide to buying a property to do up.
Is Buying a ‘Fixer-Upper’ a Good Investment?
When you’re surveying the housing market, you might spot opportunities to turn a profit by going for a property in some degree of disrepair with the intention of doing it up. Of course, while you’re able to acquire the property for less money, you’ll have an additional financial outlay in the form of all the work it’ll require. It’s not a commitment for the faint of heart and it needs careful consideration, but there’s no shortage of up-sides to it. If you’re looking for somewhere to live for a long time, you can end up with a property that conforms entirely to your own vision, and the money you save (via a lower asking price) can all go towards realising that vision.
What are the ‘Pros’ of Buying a Property to Renovate?
If you’re looking for a home in exactly the location you most desire and which conforms to all your ideas about size and space, you can be quite quickly disheartened. Sometimes, there’s just nothing out there that’s quite right. But when you factor in properties that need considerable work, suddenly you’ve got more options. One rule of thumb for people looking in towns and cities: don’t go for a dilapidated property on a street full of dilapidated properties. However much you do up yours, its price will still be affected by the bad condition of its neighbours. Instead, go for a property in disrepair on an otherwise wonderful, well-kept street. That’s where you’ve got the most room for increasing value. It’s vital that the property you select be priced in a way that reflects its poor condition.
What Kind of Value Can I Add to a Property by Renovating it?
Lofts, basements, kitchens and bathrooms are where the value can be added. It’s possible, with an investment of a £30,000 loft extension to add over £95,000 to the overall value of a property. A new £10,000 kitchen can nudge up overall value by £25,000. Of course, such figures are estimates and best-case-scenarios, and depend on other variables. For example, will your loft extension contain another bedroom and bathroom or, with the addition of a kitchenette, even create a mini-apartment at the top of the property? If so, you’re looking at considerably more value.
Easier Renovations That Anyone can do
Renovation doesn’t have to mean an array of tradespeople, noise and disruption. Although the smaller ‘fixes’ won’t have a dramatic effect on your property’s price, they will give it a push when it’s back on the market and help it sell for the most it can get. If you’re a confident DIY fan or an eager novice, you can tackle lots of mini-upgrades all by yourself, including cheap or passé decor; squeaky hinges, doors, flooring and stairs; degraded sealant in bathrooms and kitchens; wall and ceiling cracks; bad drain smells; damaged or dripping taps; tiling work; damaged windows; and much more besides.
Staying on Top of Your Budget
This is where it can start getting tricky. Once you’re a certain way into a renovation, there’s little turning back and expenses you didn’t account for can multiply. You might get rid of wallpaper only to discover that the walls themselves are in far greater distress than you had anticipated. Budgets are often very difficult to stay within, so protect yourself by allowing for this up-front. Going into a renovation with a flexible budget is the best approach.
What if my Renovations Don’t Change the Property’s Value
This may not matter if you’re intending to stay somewhere indefinitely, but there’s a risk that you could spend £100,000 and yet not add anything like £100,000 to the value of your home. The value of your property will be, in part, defined by the area it’s in, so sometimes there’s only so much value that can be added. Other variables, such as local demand, will also affect overall value. If your main aim in renovating is to increase the value of your property, then a strict budget and avoidance of unnecessary expense, are the pivotal factors.
What if You’re Saddled with Inept Builders?
It’s every buyer’s nightmare; getting some way into a job and then realising the people you’ve taken on aren’t up to the job or even vaguely conscientious about it. Fortunately, this is also a pitfall it shouldn’t be too hard to avoid. Always go with recommendations from friends and family and do extra due diligence on top of that. Develop an ear for fake online reviews, so you can use sites like TrustPilot, which are undoubtedly helpful, in a discerning way.