Refurbishing Property: Is it right for you?
Love DIY? Good at future projection? Then refurbishment property may be just up your street (pardon the pun).
Buying a wreck and doing it up to the extent it’s not just habitable but intensely marketable (either for selling or rent) is a popular sector of the property market. And it’s easy to see why. Not only does bringing a property up to standard bring a sense of satisfaction and a feeling of a ‘job well done,’ it’s also a great way to boost your income. And then there is all the fun you’ll have bringing it all together, particularly if interiors is your thing.
Around a decade ago it seemed that everyone knew someone in the UK who was at the refurbishing properties lark. You only had to switch on the TV to find a home renovation show on at least one of the four main channels. The recession put paid to all that thanks to the demise of the once-flourishing property market but now that it’s reviving again, the desire for refurbishment properties is steadily growing. And there are certainly a lot of abandoned, derelict and dishevelled properties out there to choose from.
Where to find a refurbishment property
- Websites: Will list exclusively what they term ‘unmodernised properties’ in the UK.
- Property auctions: These are an excellent means of picking up a property bargain since in most cases the seller is looking for a quick sale. Get the catalogue prior to the auction and if you see a potential property then do plenty of research into the area and the house itself before even thinking of putting in a bid.
- Estate agents: Go inside and ask since the likelihood of them advertising a complete wreck on their notice boards is a little slim to say the least.
- Land Registry: If you happen to be out walking and see a derelict property but there’s no-one else around to ask for details then it’s possible to find who owns the house by checking out the appropriate HM Land Registry.
- Hidden opportunities: You’ll often find a derelict house where land is being sold.
What to be careful of with a refurbishment project
- It’s easy to get carried away and go overboard buying expensive top-of-the-range fixtures and fittings in the property. The main idea is to make the house or apartment plain enough to appeal to as large a number of potential renters or buyers as possible. There is no point spending a fortune on gold taps for instance unless you plan to place the property at the luxury end of the market. It’s also important to assess the market; what’s the biggest demand for?
- Be sensible about the amount of work that needs to be done. For instance there’s a difference between a property that requires rewiring and a new kitchen to one which doesn’t even have a roof to begin with.
- Make sure your finance is in place before going to look for a property as some mortgage providers are reluctant to lend for a refurb; others may only give you a certain percentage of the mortgage, meaning you’ll have quite a substantial shortfall to make up yourself.
- It’s important to have planning consent from the local council prior to making any major renovations.
- If you’re not going to do the work yourself, make sure the builders and contractors you do employ are reliable. Expect to spend quite a bit of time chasing up materials, managing contractors and maintaining your cash flow. Write up a contract for the builders and include penalty points for milestones missed.
- Remember that you’re in this to make a profit, and that time is of the essence.
- If you would like to learn more about how to successfully 'Refurbish Property to Sell or Let' and build your own wealth through property investing then please join us at our next Masterclass on 26th April; see more details and how to book below.