There are plenty of different reasons you might want to opt for renovating a house over buying one that is ready to move into. For one, it allows you to purchase a home that has a lot of character to it. Secondly, it can offer you a big opportunity to get a significant return on your investment. However, you do need to do your due diligence and research your options if you want to make a wise purchasing decision.
One of the biggest downsides of buying a property that requires renovations is the fact that you could accidentally buy into a money pit. A home that requires a lot of renovations isn’t always a good thing. If you choose wrong, you could end up buying a home that drains you of your funds.
How to Spot a Home With Renovation Potential
To figure out whether or not a home has good renovation potential, you’ll want to consider the following when looking at the property.
- Is there any room to extend the property? Is there room on the side? Is there room on the front? These things can dictate whether or not the property lives up to your buying criteria.
- Look at the other homes in the neighbourhood. You should be able to see whether or not they’ve been able to get the necessary planning permissions they need to make similar renovations to what you are looking for.
- Look to ensure that you are choosing a house that is located in the right spot that you are looking to live.
- How much of the renovation work is going to be surface-level versus structural. Keep in mind, surface-level renovations are much cheaper.
- What is the price range of the different homes in the area? Determine whether or not the renovations that you are looking to make will add significant value to the property.
Before purchasing any type of home for renovations, you are going to want to factor in all of the expected costs.
Any Reconnection Fees
You want to look to see whether or not there will be any reconnection fees associated. Some homes will require reconnection to a water supply. If there was one, it could have been disconnected which means you need to pay for the reconnection. Also, you need to factor in any electricity because it’ll be needed for the operation of power tools and various other daily living requirements if you’re living on the premises during the renovations.
- Any valuation fees.
- Council tax.
- Any fees to hire professionals. If you are going to be renovating, you might find that you need to hire various people to look over the property. This could include but isn’t limited to hiring people to go over building regulations, surveys, structural engineers, and more.
- Contingency fund. This is something that you’ll have to factor into your decision. You will want to have plenty of cash on hand that can cover the various expenses you might have. You want sufficient cash to put towards any unexpected expenses that crop up.
- Legal costs. You need to have some of your budget allocated towards legal costs. You can expect to pay a good amount to have a solicitor come by and act on your behalf.
If you are looking to purchase a home for renovation, you are going to get help from a chartered surveyor, KJM Group can assist you with this. They will be there to flag any potential concerns that you have that would have an impact on the sale. You can arrange this type of survey before putting any money down or even making an offer. However, the homeowner will need to consent to this. Not all will and it’s typically something that is only done after an offer has been accepted.
The surveyor will be there to make further recommendations if they suspect:
- An infestation.
- Subsidence or heave.
- Drainage issues.
A full and comprehensive building report will reveal what kind of construction methods were used in making the house. These will typically vary if the home has been renovated in the past. From there, you can use this information when you are making your renovations to ensure that you are using the right materials when making your renovations.