Create your dream home for the same price
It can be very difficult to find the ideal property in the perfect location. However, purchasing a rundown property in a location that you desire could be a viable alternative option that you might want to consider. If renovating for profit is something you are serious about, purchasing the worst house that you can afford on the best street can give you the maximum scope in order to add value. The property in its current condition most likely will turn off many people, so that should be reflected in the price. Since you are an individual renovator, you will not be able to change the street or influence the area. However, the house can be completely transformed, and if necessary completely rebuild.
A majority of the profit is made at purchase instead of what you end up doing with it. Therefore the price that you pay is critical. Ideally, you want to purchase a property that has potential that has not been discovered yet by others. That way, you will not have to pay a premium. Unless you are purchasing a large property there is a good chance that the potential profit margin is fairly narrow. Therefore, you really need to consider what you are willing to pay for a property.
Potential for adding significant value
It is widely known that there are certain investments that are nearly fail-safe. Making investments in certain parts of the house like bathrooms, kitchens and unused areas (basements and lofts) can significantly increase a property’s value. It is estimated that if £10,000 is spent on a new kitchen it can add £20,000 to £30,000 to the eventual value of a property. A loft extension will cost about £35,000. However, it can potentially add as much as £100,000 to a property’s value if another bathroom or bedroom is added, depending on the location of the property.
Even smaller projects can help to make a new house feel like home
It is not necessary for all renovations projects to be ones where you are attempting to make a large project or to be a major undertaking. If you are having a hard time finding a property that you really like, taking a project on can sometimes be a great way to create a home you do really love. A property’s value is not directly affected by small defects. However, combined, they will prevent you from being able to sell the property at its optimum price. Below are typical defects that may put off many buyers. However, a competent DIYer can easily fix them:
- Dated decor – including dado rails and Artex ceilings
- Lifting flooring
- Cracks in plaster works and ceilings
- Stairs and floors that squeak
- Windows that are damaged or broken
- Sewer smells
- Tiles that are loose
- Mouldy sealants in bathrooms and kitchens
- Dripping taps
- Broken door latches
- Windows and doors that are squeaking or sticking
- Peeling paint
There is a good chance you will run over your budget (and run out of patience as well)
Although there is great potential for increasing a property’s value when you renovate, there is always a good chance that you will overspend on your project without real value being added. Spending thousands on a property does not guarantee that you will thousands back in return. Whenever you are doing a property renovation, you need to be realistic in what you can achieve, and also well-informed in how you can achieve it. Most important of all, you need to be very strict with sticking to your budget. See here for disabled wet room regulations.
It is best for you to allow an additional 20% to your initial budget. That way you will be prepared for unforeseen problems that may arise, especially if any structural work is needed. A simple rule could be to not spend any money on making major changes that will not add to the property’s value. This is where it can come in handy to work with your local Romans property expert.