Whether you’re a first-time buyer looking to get on the property ladder, or a home-owner looking to move somewhere cheaper, you’re probably looking for the best way to get the most for your money. While you're on the hunt for bargains, it might be worth looking at a fixer upper.
According to Rightmove, homes that need renovating are the most in demand among buyers right now. There are lots of reasons for their growth in popularity, from their lower price point to the opportunity to personalise the rooms to your taste. In this blog we’ll talk you through all the advantages of buying a property renovation and what you should look for before buying.
What advantages are there to buying a property that needs renovation?
The most obvious reason you might buy a home that needs renovating is the price, as properties in need of renovation are around £29,000 cheaper than the national average. If you’re a first-time buyer struggling to afford a home in your area, or want to move up the property ladder without too much of a jump in cost, buying property that needs renovating could be ideal for you.
While not a completely blank canvas, houses that require renovation provide you with the opportunity to create your dream home. You'll have the freedom to design the home you've always wanted, whether it's installing new flooring in the living room or installing a bay window in your bedroom. You can personalize it as much as you want and tailor it to suit your needs.
Potential for profit
Purchasing a property that needs work can be an excellent investment opportunity, especially if you can secure the property for a lower price. With some smart renovation work, you can significantly increase the value of your property and sell on for a much higher price than what you bought it for.
What should you look out for in a renovation project?
This depends on a lot of different things; your budget, your timeline, whether you plan to sell the property or keep it long-term. The two main things to look out for are:
Condition of the property
When it comes to buying a house that needs renovating, there are lots of types of projects that range widely in terms of commitment of time and money. Homes which just need cosmetic renovations like repainting the walls, putting in new cabinets and even redoing the flooring will cost more upfront, but will be quicker to fix up and you can probably do most of the work yourself. Houses which need structural changes, such as tearing down walls or redoing the electrics, will be more labour intensive and have a high renovation costs, but should have a cheaper upfront cost.
Renovating a property to increase its value often involves structural modifications that may require planning permission. This can involve quite a bit of research. Consult with a contractor to see what is feasible for the property and determine whether the necessary planning permission is already in place. It’s also worth looking at neighboring properties. If several houses on the same street have visible extensions or loft conversions, it is likely that you will have permission for similar modifications.
If you’re a first-time buyer:
Your budget will likely be lower as you get started on the property ladder, but don’t necessarily be pulled in by ultra-low-priced fixer uppers. They may have a lower upfront price, but will cost more in the long term with major structural projects. It’s also important to think about your living situation. If you’re buying your first house you might not have any other housing options, so you will need a house that is at least habitable upon move in.
If you’re aiming to move up the property ladder:
You’re likely looking for a larger space with more bedrooms and square footage. Look for houses with potential for extensions, either by expanding the back or utilising the loft, and check if any planning permission is already available. You should hopefully have a bigger budget than a first-time buyer, allowing you to plan bigger projects and more impactful renovations.
If you’re looking to invest:
You will probably want to target the lowest cost homes that need the most renovation to try and ensure bigger profit margins. Make sure you have a clear plan before going in of what needs doing, how long it will take and how much it will cost. Then research sold houses in the area (try and find similarly renovated houses if you can), and see if your estimated costs would still be low enough to turn a profit.