Purchasing a property for a renovation project
Sian Hiatt, Sales Manager, helps us gain a better understanding of what we need to consider when purchasing a property with a view to renovating it...
The thought of purchasing a property that needs some tlc in the form of a full or partial renovation to bring it up to living standard may be a frightening prospect for some, but for many others it's an exciting opportunity to not only transform a home exactly as they want it, but to also make a sound investment - provided the numbers make sense.
Before diving head first into purchasing a property for a renovation project, slow down, take a deep breath and begin to consider what will make a property the perfect doer-upper for you.
Firstly, will this be a renovation project that'll deliver you the dream forever home? Or will it simply be an investment whereby you're hoping for a quick turnaround by purchasing, doing it up and then selling it on for a profit or by renting it out to tenants as a longer term investment?
If it's the former, the majority of things you want to consider will be personal to you and your family, such as is this the right size property with the right potential to expand if needed? Do I like the area? Can I see myself living here for a long time?
If it's the latter, you'll want to take a more business-minded approach by considering exact costs involved for the project, timescales, potential pitfalls, demand in the area as well as recent sale prices of similar properties that were already in good condition etc.
Budget, budget, budget
Taking the property renovation route means careful budgeting is needed. You need to be clear from the outset exactly what your overall budget is so that you can search for ideal properties that you know you can afford to bring up to the required standard. The last thing you want is to be stuck with a property that you're halfway through renovating, only for finances to run dry.
Arguably the best way to save costs on a renovation project is by conducting as much of the work as you can by yourself or by people you know and trust. However, do remember that the work needs to be safe and to the correct standards, so sometimes you may have no choice but to call in experts to carry out particular work - be it an architect, plumber, builder, electrician etc.
All of these things need to be budgeted for from the outset. To do this, you could consider taking along contractors while viewing the property before you purchase so that you can get accurate estimates for the costs that are likely to be involved for the renovation. These costs will be estimates, so your best bet is to always overestimate how much things will cost so that you have a safe surplus of funds that you can dip into if needed.
Get the location right
If the property renovation is for you and your family you need to be sure you'll be happy living there and that it offers all the amenities your family will need. If it's an investment and you want to sell or rent the property once the work is complete, you need to be sure it's a desirable enough area that will appreciate it's newly renovated state by adding value to the asking price and that it appeals to the buyers or renters you'll be looking for.
This might also include making some careful and educated predictions - for example, there may be an up-and-coming area that offers properties at a modest price right now but in the future those property prices may be likely to increase considerably as demand increases.
Conduct your own survey
A mortgage lenders valuation isn't really going to cut it if you're purchasing as an investment, so it'd be very wise to carry out a more intrusive survey through a surveyor acting entirely on your behalf before purchasing so that you're not hit with any shocks and surprises mid-renovation. Of course, as a renovation project it'll go without saying that a lot of work will need to be done, but it's unlikely you'll want to face structural defects or any other extremely serious problems that may cost huge sums of money and a great deal of stress to rectify.
Be fully committed to the renovation project
It's no good going into a renovation project half-hearted, it really is an all-or-nothing purchase. During the project you'd be very lucky to not face problems of some sort, some of which could lead to your budget being tested or projected completion dates being pushed back weeks or even months.
Your initial outlay will be cheaper on a property that requires a lot of work, but you have to be sure that the finances you'll be putting into the project make sense. Go through the pros and cons of the purchase, consider potential hurdles you may have to overcome and think about the long-term predictions you have once the renovation is complete.
If you decide it all makes sense and it's the right thing to do, go into it fully committed.
If you need help or advice with finding the right property for your renovation project, don't hesitate to contact our team of experts here at CPS Homes. We have three branches across Cardiff, so our knowledge of the city is second-to-none. You're welcome to contact us by calling 02920 668585 or by e-mailing enquiries@cpshomes.co.uk.
