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. One option you might be considering is buying a house renovation.
According to Rightmove, homes that need renovating are the most in demand among buyers right now. These types of homes are popular for good reason, from their lower price point to the opportunity for personalisation. If you're thinking of taking the plunge and buying a fixer upper, we've put together a list of things you should look out for and all the benefits of taking on a renovation project.
What should you look for in a renovation project?
What you need to look out for in a renovation property depends on a lot different things, from your budget to 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 higher renovation costs, but should have a cheaper upfront cost.
There are lots of different ways to renovate and add value to a property, including structural changes that may need planning permission. This will involve a bit of research. Get a consultation from a contractor to see what they think is possible, and see if the property already has planning permission. Don’t forget to check out the neighbours; if multiple houses on the same street visibly have an extension or a loft conversion, it’s likely you’ll be able to as well.
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 moving in.
If you’re looking to move up the property ladder:
You’re likely looking for a bigger space, somewhere with more bedrooms and square footage. Look for houses you think you’ll be able to extend, whether out the back or up through the loft, and see if any planning permission is already available. You should hopefully have more money to play with than a first-time buyer, allowing you to plan bigger projects and more impactful renovations.
If you’re an investor:
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.
What are the advantages to buying a house that needs renovating?
Lower price point
The most apparent reason for purchasing a home that requires renovation is the price. Properties in need of renovation are £29,000 cheaper than the national average. If you're a first-time buyer struggling to afford a home in your area or wanting to move up the property ladder without a significant jump in cost, renovation projects could be an ideal option 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 requires work can be an excellent investment opportunity, particularly if you can secure it at a lower price. With some smart renovation work, you can significantly increase the value of your property and sell it for a much higher price than your initial investment.