Considering a house purchase with the intention of renovation? Our comprehensive guide provides essential insights to help you navigate the process confidently before diving in
In the ever-changing world of real estate, buying a house to renovate can be an exciting venture. Here's a step-by-step guide to help you navigate this process, ensuring a thorough, well-informed renovation plan that meets your goals while controlling costs and risks.
Define Your Renovation Goals
Start by clearly defining what you want to achieve. Are you looking to update specific rooms, add space, or modernize features? This focus will guide your planning and budgeting.
Assess the Current Condition of the House
Perform a detailed, room-by-room evaluation of the house’s layout, structural integrity, and aesthetics. Identify strengths, weaknesses, and areas needing improvement. Look for cramped spaces, outdated designs, and functional issues.
Inspect Major Systems and Structures
Examine the roof, foundation, windows, plumbing, electrical, heating, and HVAC systems. Identify necessary repairs or upgrades and watch for hidden problems like water damage, mold, asbestos, or outdated wiring that could increase costs.
Consider Location and Size Suitability
Consider whether the house’s location fits your lifestyle and future plans, including access to schools, amenities, and transportation. Assess if the size and layout meet current and anticipated needs.
Plan Your Budget and Contingency
Develop a realistic renovation budget covering materials, labor, permits, and include a 10-20% contingency for unforeseen expenses. Consulting professionals early helps avoid overruns and resource misallocation.
Design and Aesthetic Considerations
Envision the final look aligned with your taste and lifestyle, considering architectural style and how changes will enhance functionality and beauty.
Plan the Project Timeline and Inspections
Plan a renovation timeline, including final inspections of plumbing, electrical, and HVAC systems to ensure compliance with codes and quality standards. Consider hiring third-party inspectors for unbiased assessment before project completion.
Engage Professional Help and Warranties
Engage reliable contractors who offer workmanship warranties and coordinate manufacturer warranties to safeguard your investment.
Specialist Funding May Be Required
When buying a house to renovate, specialist funding like self-build mortgages, bridging finance, or renovation mortgages may be required.
Determining Potential Profit
To determine the potential profit, total costs (purchase price, renovation cost, and fees) should be subtracted from the estimated resale value, aiming for a profit of at least 20%.
Factoring in Hidden Costs and Rent
When assessing a house to renovate, the price should be carefully calculated by researching the area, understanding property trends, comparing the property’s asking price with recent sales of similar unrenovated properties, and factoring in hidden costs and rent if necessary.
Finding the Right Property
Visiting estate agents in the desired location can help find renovation projects. Major property portals like Rightmove and Zoopla can also be used to find renovation projects. Specialist sites like Plotfinder.net can be used to find renovation opportunities.
Assessing the Property
When viewing a potential renovation project, look for structural issues such as big cracks in walls, gaps around windows or doors, and signs of damp. It's worth taking a builder along when viewing a potential renovation project to get an accurate assessment of costs involved.
Additional Considerations
The area the house is in can determine some renovation costs, with protected landscapes such as national parks and conservation areas having more planning restrictions and potentially requiring the use of traditional materials. Drainage searches can reveal issues such as the need to replace a septic tank or move services to accommodate an extension.
Living Through the Renovation
Living in the property while working on the renovation can create stress due to dust and disruption.
Expert Advice
Robin Edwards, a partner at property buying agents Curetons, regularly advises clients on the purchase and development of properties, including on the potential of renovating and extending their homes. Thomas Goodman recommends counting in big-ticket items like windows, boiler, radiators, and electrics when assessing costs.
- With a focus on updating specific rooms or adding space, buying a house for renovation can be an exciting undertaking in the ever-changing real estate market.
- Clearly defining your renovation goals, whether it's updating room aesthetics or modernizing features, is crucial for guiding your planning and budgeting.
- Conduct a comprehensive, room-by-room evaluation of the house's layout, structural integrity, and aesthetics to identify strengths, weaknesses, and areas needing improvement.
- During the evaluation, examine major systems and structures like the roof, foundation, windows, plumbing, electrical, heating, and HVAC systems for necessary repairs or upgrades.
- Consider the location's suitability for your lifestyle and future plans, considering factors like schools, amenities, transportation, and the house's size and layout.
- Develop a realistic renovation budget for materials, labor, permits, and a 10-20% contingency for unforeseen expenses.
- Engage professionals early to help avoid overruns and resource misallocation, ensuring your renovation plan aligns with your goals while controlling costs and risks.
- Envision the final look that meets your taste and lifestyle while considering architectural style and functionality.
- Plan a renovation timeline, including final inspections of plumbing, electrical, and HVAC systems to ensure compliance with codes and quality standards.
- Hiring third-party inspectors before project completion provides an unbiased assessment of the work.
- Reliable contractors offering workmanship warranties are essential to safeguard your investment, while coordinating manufacturer warranties is also beneficial.
- When buying a house to renovate, specialist funding like self-build mortgages, bridging finance, or renovation mortgages may be required to cover project costs.
- To determine potential profit, subtract the total costs (purchase price, renovation cost, and fees) from the estimated resale value, aiming for a profit of at least 20%.
- Hidden costs and rent must be factored into the price when assessing a house to renovate.
- Visiting estate agents in the desired location and using major property portals like Rightmove and Zoopla can help find suitable renovation projects.
- Specialist sites like Plotfinder.net can be used to find renovation opportunities tailored to your needs.
- When viewing a potential renovation project, look for structural issues such as big cracks in walls, gaps around windows or doors, and signs of damp.
- Bringing a builder along when viewing a potential renovation project offers an accurate assessment of costs involved.
- The area the house is in can affect renovation costs, with protected landscapes potentially requiring the use of traditional materials and having more planning restrictions.
- Drainage searches can reveal issues such as the need to replace a septic tank or move services to accommodate an extension.
- Living in the property while working on the renovation can create stress due to dust and disruption.
- Expert advice from professionals like Robin Edwards of Curetons can be invaluable when purchasing and developing properties, including renovation opportunities.
- Thomas Goodman suggests counting in big-ticket items like windows, boiler, radiators, and electrics when assessing costs during the renovation process.
- Additionally, evaluating the potential for solar panels or other energy-efficient upgrades can lead to savings on utility bills and increased home value while reducing the environmental impact of your renovation project.
