Investing in property is investing in your future. You have to start somewhere, in order to progress up the ladder.
So, if you’re about to hop onto the first rung, or you are fairly near the bottom and want to progress up, this article will help you on your way. We help answer the question how can property refurbishment add value?
Why are property refurbishments cheaper than looking for somewhere new?
Unfortunately, the reality of investing in property, in this day and age, is that it is an expensive business. Not only have house prices risen, but non-mortgageable costs involved with moving have also seen a price hike.
The cost of refurbishing your property, to add value to it, has not risen at the same rate as house prices themselves.
So, it makes sense then, that for the vast majority of buyers, the dream is to buy somewhere that is immediately liveable in, but with the potential to be refurbished in order to create value in the future. Ultimately, it’s cheaper to stay put and upgrade your existing property, than it is to keep on buying afresh in order to scale up.
Although harder than it once was – it’s still possible to add value to your property, by undertaking the right work to shift up a price bracket. Not only should you make your money back, but you’ll make a profit too.
Bear in mind, if you are planning serious renovations and refurbishment, don’t be the person that tries to do it on the cheap, uses a cowboy builder, or who doesn’t pay attention to the ceiling price. Ensure you prepare thoroughly before undertaking works.
Make sure everything you do to your property comes with a contract of works and a guarantee post works. This is your most valuable asset, you want it to gain value, not lose it!
Are you Prepared to Refurbish your Property?
First, before you start looking for a property in which you can create value; you need to be certain that you actually want to undertake such serious works.
The reality of living on a building site, for months on end, is not for everyone. In my experience, this isn’t always something that everyone considers before they start. Although rewarding it can also be an incredibly stressful time.
You can still ‘add’ some value through smaller works:
- Changing the bathroom
- Updating the kitchen
- New carpets and curtains
All of these can be achieved with minimal disruption.
But if you want to ‘create’ value for your property, you will have to add space:
- Loft conversions
Are all ways to add to your property.
But how do you find such a property to create this value to? What should you be looking for when you go to property viewings?
Property you can add value to
The easiest way to get on the property ladder, as a first-time buyer, is to purchase somewhere with easy re-saleability. Somewhere with a good view, or a big garden is ideal.
Consider buying a one bed, top floor flat. You might be able to extend into the loft and create a second bedroom (ensure your solicitor verifies ownership of the loft space, and that you have the freeholder’s permission, before you go ahead with any works).
Searching for a property to refurbish
What should you look for in a property you want to refurbish? Here are a few things to keep an eye out for:
- Check other properties on the street- do they have similar extensions or have they had structural works done on them?
- What works have the neighbours had done?
- Will you be setting a precedent by applying for planning permission?
- Will it be easy to get planning permission?
- Adding square footage for living space is more valuable than adding square footage for sleeping space
- Can you extend existing living space, or can you only extend or create bedrooms?
Know your budget
Finding the property to refurbish is only half the battle.
You also have to assess your finances and ensure you have the budget to be able to carry out the works, and that you have a great builder to do the works for you.
Until you know your budget, you will be unable to assess what level of works you can undertake. Plus, not every builder can do every job.
Finding a builder that fits in with your timescale, budget and proposed works plan can be harder than finding the actual property to refurbish!
Top tips for property refurbishments
Once you’ve decided you want to refurbish your property, how should you go about it? Here are some handy hints for choosing a builder:
- Look for a builder when you look for your property
- Ask around, as you will want a builder that comes highly recommended
- Always ask to see examples/evidence of the builder’s previous works
- Try and shortlist at least three builders for your refurbishment work
- Anticipate a long lead time before works start. Good builders typically have a three month lead time as standard
- Never assume anything in need of modernising will be priced correctly
- Sometimes you may even have to pay a small premium for a property that needs developing – due to the potential for making profit
Finally, always make sure you carry out a thorough analysis of the area before you commit to a wreck that needs doing up.
Remember the old adage: ‘the worst house on the best street is far better than vice versa’.
Before you decide what work to undertake have a look at the planning history in the surrounding area to see what neighbours have done or are doing. Knowing what planning has been approved or even rejected, can give valuable insight while you make your own renovation decisions. Get your full report here!