It can be said that buying to renovate has become somewhat of a trend to make some extra cash. But renovating to live in can also deliver some money-saving delights with a property custom made to the vendors’ requirements. However, it is not something to enter into lightly as it is a large commitment, and poor budgeting and planning can lead to unnecessary over-spending.
Money is the essential ingredient when deciding on your purchase and your finances will need to be clearly budgeted. Your overall budget will dictate how large the project will be and how long it will take. If you will need to borrow from a lender it is important to communicate with them early on about the type of loan you will require. Most banks and building societies will offer a capped loan for rundown properties until the work is carried out. Some can offer a phased release agreement, where money is released at key stages of the renovation. In either case, know where you stand before the planning begins.
It is quite rare to find a reasonably cheap property that only has cosmetic or superficial problems, even with a private house sale; you’ll be looking at more serious problems like structure and subsidence. This is of course no reason to run for the hills in panic, it just requires knowledge and research (with quotes!) before you contemplate taking on the job.
For those renovating a property to then sell on, researching current market prices in the area is always a good place to start. You can then compare the current property price to the price it would achieve when the renovation is complete. The same applies for those buying to live, as it will give you a clear indication if you will save money by doing the work yourself or by just buying a “ready to live in” property. Buying a derelict property from a private house sale let’s say for £110,000 may seem like a bargain, but if the houses in the area sell for £150 and your renovation is going to cost £45,000 then you can clearly see that you will be out of pocket.
Gain all the possible information about the renovation before purchasing the property. Find out the exact problem with the property, and consult the professionals for advice and quotes. This will give you an idea of the cost and overall size of the project that in the end may or may not change your mind. If you are planning conversion work, such as converting a house into a flats then be sure to consult with your local planning department. Early consultation may save problematic issues later on.
When you have found the ideal property to renovate, it will be essential to arrange a full structural survey. This is a detailed report about the condition of the property and can expose major and minor damage that needs to be addressed. If the survey does pick up some unknown issues with the property, this may give you a chance to negotiate the purchase price.
A guest post by our online estate agent friends at iThink Property.