Taking on a property that needs a lot of work doing to it can be a shrewd investment – as long as you weigh up the pros and cons first.
Are you ready to take on a renovation project? Although there are some bargain buys out there that could make you a tidy profit further down the line, renovation is not without risk, and it’s certainly a lot of work, from the planning and organisation to the actual knocking down and building.
You could come unstuck if you’re tempted to rush into starting work without first taking stock of your finances and the structural condition of the property.
So before you take the plunge, make sure you have a realistic idea of what you’re getting yourself into and consider these factors.
From the outset, it’s important to set yourself a realistic budget. People often end up spending twice as much as they bargained for. We suggest you tack on at least an extra 20% for those unforeseen issues that will inevitably spring up.
Although a property that needs doing up will be cheaper to buy initially, consider whether you have enough funds to cover major improvements. You may just want to put in a new kitchen and bathroom, but once you start ripping out the old fixtures and fittings you can find anything from rotten floor joists to damaged brickwork.
Check how easy it will be to get planning permission for the house. If you want to make extensive changes or you’re thinking of buying a listed building, you’ll need consent from your local authority. Once your application has been submitted, it could take up to 12 weeks for the council to make a decision. This allows for neighbours to have their say.
These days, most smaller renovation projects don’t need planning approval, so there are plenty of properties you can do up under permitted development if you want to get cracking straight away. You can find out more on the Government’s planning portal website.
You can either manage your own project or employ a project manager. The benefit of hiring someone is that they will liaise with builders to ensure the work is carried out to a specification, and their experience avoids unnecessary costs and saves you from having to be on site all the time. But the downside is that you will have to pay for their expertise.
If you’d rather manage the project yourself, make sure you get quotes in advance so you can calculate your expenditure. And be prepared to live on a building site.
Think carefully about how much of the work you could take on yourselves. You may be an enthusiastic DIY-er, but could you plumb in a loo, fit a kitchen or tile a bathroom? If the honest answer’s no, you’re much better accepting this at the beginning and getting the professionals in from day 1 rather than having a bash yourself.
Even if your practical skills are negligible, there are some things you can do to keep costs down, from stripping wallpaper to tidying up.
With an older property, you should be prepared for more unexpected costs, which all add to your expenses.
Make sure the property you buy is worth having the money spent on it. It could be so run down that it will cost a lot more than expected to repair. Using the wrong renovation techniques in old buildings can cause extensive damage, while subsidence issues could make it harder for you to get buildings insurance.
Electrics in old buildings will often require updating. Have you considered that the cost of rewiring a typical three-bedroom house could run into several thousands of pounds?
Renovating a property can be a lengthy – and stressful – process. Before you know it, 5 years have elapsed and you’re still living on a building site. Try and work out a realistic timeframe before you commit, seeking advice from tradesmen and leaving yourself some wiggle room for any unexpected jobs. Build in a week off or 2 as well, renovation can be stressful and you’ll deserve the odd break.
Remember to also factor in other demands on your time. If you have a busy job or small children (or both!) and plan to do much of the work yourself, you’ll probably need a more generous timeline.