With many buyers still priced out of the property market, many will be tempted to buy a rundown building at a bargain price and renovate. But converting or renovating a property is not a job to be undertaken lightly and if you're not careful, it can turn into a real money pit.
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On the other hand, a successful renovation will leave you with a sense of satisfaction and achievement, and could even land you a healthy profit. If your dream is to return a rundown property to its former glory, here's what to consider before you start splashing the cash.
Before you start trawling internet sites and local estate agents, it is essential to take a long, hard look at your finances. Work out exactly what you can afford to spend in total as this will dictate what property you buy and how big a project you can realistically take on. For example, if you are planning to work on the renovation yourself, you'll need to plan how you will afford to live while doing so. Similarly, if you are hoping to take on an old ruin, you'll need to factor in the cost of renting a property or on-site caravan in which to live until the property is habitable.
If you are taking out a mortgage or loan to finance the renovation, shop around for the best deal. Some providers offer specialist mortgages for renovation but be aware that the payments are usually made in stages and the lender may insist on inspecting the work before the next payment is released.
Most importantly, make sure there's extra cash available for the inevitable unforeseen issues. Most property developers recommend having a 15 per cent contingency fund.
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Once you've worked out what you've got to spend, you'll have a better idea of what you can realistically take on, but if you've had to wait some time for a suitable property to come onto the market it's all too tempting to launch in without properly thinking things through.
If you think you may have found your dream project, take a step back and consider factors such as the location (is it in an area where property values are high or on the rise?) and essential services (having plumbing, electricity and gas supplies fitted from scratch can cost a fortune).
Equally important is to properly take in just how much structural work needs doing on the property, as this can very quickly swallow your renovation budget. Get a surveyor in to assess the state of the building and give you an indication of what will need to be repaired or replaced before you splash the cash. Also, be aware that you may need planning permission to structurally alter the house or extend so do check with the local authority if that might be the case.
If you have the money it is definitely worth investing in a project manager to take the stress out of the renovation. However, for those determined to take on this potentially mammoth task, a detailed and logical plan of what needs done, when and by who is an absolute must.
For those hiring a mobile home in which to live while the work is going on, make sure the essential work that will make the property habitable is done as early as possible as you can then move in and save money on renting.
Living on site will also help you to keep track of what's going on and check that work is being completed on time and, as far as possible, on budget.
And be prepared for the odd surprise. If there's one thing Grand Designs has shown us, it's that renovation projects rarely, if ever, get done without the odd hiccup.
Once the structural work is complete and the house is ready for those finishing touches you've been dreaming about, it's important to remember why you've taken on the project. If you're planning to make it your own home, then feel free to let your imagination run wild. Should you hope to sell the property on for a healthy profit though, keeping a developer's head on will ensure you make the right decisions.
Though you will have invested all your time, energy and cash into the project, it's easily ruined by bad decor choices that can make the value drop like a stone. Remember, your personal taste might not suit everyone so it is worth keeping fixtures and fittings (including bathrooms and kitchens) functional, desirable and neutral so as to appeal to the widest possible audience.
Of course, renovating a property can be stressful both physically and mentally, not to mention putting a potential strain on your finances, but ultimately, get it right and you'll find it an extremely rewarding experience.
Have you renovated a property? What are your tips for success? Leave your comments below...