Buying a Renovation Project
It can be so tempting to buy a renovation project, especially if it seems like an excellent price, but it’s important to consider if buying a renovation project is worth it.
It’s become very fashionable to do up a wreck – numerous television programmes on the subject are largely responsible! Our clients frequently request a ‘renovation project’ but baulk when faced with the reality. It’s better to analyse yourselves in depth now! Here’s how…
Our Advice When Buying a Renovation Project
When it comes to buying a renovation project, we have seen it all before. We’ve been in the property industry for decades. When our clients come to us with a renovation project, we often advise the following.
Take advice from people who have been there – Before taking the plunge and buying a derelict property, speak to friends who have ‘had work done’ or attempted a significant DIY project – did they find it more or less stressful than they thought? You only have to watch “DIY SOS” to see the evidence of what you can be left with when the initial enthusiasm runs dry, even in a house that does not need work to be habitable. Never forget that living in a caravan through the winter season can put a strain on the strongest of relationships!
Expect to Pay a High Price – Know that renovation projects come with an ever-increasing premium. It sometimes seems that all an estate agent needs to do is generate some interest, go to the auction, and watch people fight to lay down their money – and often a good chunk of their lives and sanity!
Expect Competition – Renovation projects appeal to more than just the ambitious individual.
Private buyers are competing with developers, who are competing with private developers, who are competing with builders. Often, the over-excitement and the levels of competition lead to buyers paying well over the odds, especially when you consider that building costs are rising fast.
Is Buying a Renovation Project Worth it?
How do you know if buying a renovation project is worth it? There is a simple formula to figure this out. Purchasers should do their sums carefully and not get swept away on a tide of over-enthusiasm, abandoning all realism in the wake.
‘Estimated current market value when done’ minus ‘renovation costs’ = price you might pay for a renovation project to be worth it.
Everything else represents a ‘must have’ or ‘fantasy’ factor – and only you can know what that is for YOU.
Remember, there are lots of elements which renovation projects typically require;
- Heating systems
- Electricity and gas
- New windows
- Internal walls
- Plastering
- Structural work
- Kitchen/bathroom renovations
So, it’s important to consider these costs when determining if a renovation project is worth it.
If the sums don’t add up, maybe it is time to re-evaluate whether “To Buy or Not To Buy”.
Restoring Features of Old Buildings
It used to be the case that finding an old house with accommodation suited to contemporary lifestyles was extremely difficult. But now, that really isn’t the case, as so many properties have been renovated (or re-renovated) to a modern specification – plenty of open plan living, the pre-requisite living/eating/cooking/family space, uber-modern facilities and appliances, wet rooms, and so on, combined with beautiful original materials and craftsmanship.
Other Things to Consider
As well as the above, you may wish to consider other things when buying a renovation project.
- Building regulations – before your purchase, it’s best to familiarise yourself with local building regulations and the status of the building in question.
- Scope of work – it’s best to have a clear idea about what work is involved before purchasing. This could range anywhere from minor cosmetic changes to a full-blown renovation.
- Location – although it may be the perfect property for you, make sure the location is also perfect. Not just for your renovation but also if you’re considering selling, make sure the surrounding area is desirable.
- Timeframe – consider how long the renovations will take and if that works with your personal life. If you are going to take on the role of project manager, it will take up a lot of your spare time, so make sure you are prepared for this.
So, Should You be Buying a Renovation Project?
In the final analysis, only you know whether you want to climb the “Property Ladder” the hard way, but Stacks’ final advice is to be very, very, very cautious with your figures – and your dreams. You may find it makes more sense to buy someone else’s project when it’s finished and make a few cosmetic changes.
For more information and advice on renovation projects or for help finding one, contact the team at Stacks today.
