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For lots of different reasons, buying a property that needs renovation can make perfect sense. From developing a house for profit, to wanting to pick your own exact specifications, opting for a fixer upper can be a great way to avoid the premium you pay when someone else has carried out their own renovations. There are plenty of things to look out for and consider when buying a house to fix up, as you figure out whether the cost of renovating a house is really worth it.
Is buying a property renovation a good investment?
As with any property purchase, it’s crucial that you work out the value when buying a project house. To do this, you need to get an idea of how much it’s going to cost to do the work that’s needed, taking into account the current condition and layout of the property. You might not be able to get exact quotes for renovations, but you can certainly get a good idea of what it’s going to cost to do things like decorating, replacing carpets, fixing roofs, adding extensions and putting in a new kitchen and bathroom.
It’s also important to see whether the structure of the property is sound, and how suitable it is for things like extensions. The best way to do this is to get a more comprehensive home buyers survey, as this will highlight if there are any structural issues and provide recommendations on how to fix any issues. This can be particularly useful if you’re wanting to make big amends, such as putting in a loft conversion or changing room layouts.
Houses that need doing up usually come with cheaper asking prices, but you need to add the cost of renovations to this to work out how much you’ll end up spending. Once you arrive at this figure, you can better determine the value the property’s offering. If it’s in a desirable location and has plenty of potential, you could significantly add to this through your renovations.
Is a fixer-upper right for me?
Depending on how much work needs to be done, you need to consider whether you have the time, energy and inclination to renovate a house – as well as the money, of course. If your budget’s tight for the area where you want to buy, it can be a good idea to put what you can into the bricks and mortar of a home, especially if you’re a first time buyer. If the property you’re interested in is liveable, this can give you more time to save up for the renovations you want.
If it’s not, you’ll need to add in the cost of paying the mortgage and living somewhere else while the work’s carried out. Rental costs can be high, while you’ll also need to agree a short-term contract if you start a new rental agreement. If you’re planning to do some of the work yourself, this could end up prolonging the time it takes to complete renovations, while also putting added strain on your personal and professional life. Be realistic about your skills, and stick to things like stripping wallpaper and painting if you’ve never tiled a bathroom or plumbed a toilet before.
How to choose the right tradespeople
If you’re thinking about renovating a house, knowing where to start can be a tricky business, but hiring the right people to carry out the work is a must. This is hardly an exact science, but you need to choose tradespeople you can trust.
Recommendations from friends or family can be very useful, while there are other sources you can use to learn more about previous work people have done. Going with reputable tradespeople and a professional architect can help to guard against spiralling costs, although it’s always a smart idea to have some extra cash set aside as a contingency.
What are the hidden costs of a renovation?
More often than not, building projects never run like clockwork from start to finish. From discovering damp covered up by paint at a viewing, to finding walls in a poor state hidden by wallpaper, you may end up with a range of hidden issues that need rectifying. This is especially the case when you start ripping out old fixtures and fittings, which can reveal things like damaged brickwork and rotten floor joists.
Older houses can be more susceptible to these issues and demand you use specific renovation techniques that cost more money. You may find the electrics are outdated and need replacing, while subsidence issues can also drive up costs. On the other hand, you may discover that ripping up some old vinyl flooring reveals a beautiful set of original wooden floorboards underneath.
View our house viewing tips to try and get a suss for questions to ask and what to look out for which could add to the costs.
What survey should I get on a fixer upper?
To guard against any hidden costs, it’s vital that you carry out a comprehensive survey before buying a property that needs renovation. A basic RICS Condition Report will only highlight urgent defects that need to be addressed, so if you’re planning on extensive renovations you need to get a better survey done. A Level 2 survey should identify any structural problems like subsidence and damp, although it won’t look beyond the floorboards or behind walls. You should be getting the most detailed survey if you have significant renovations on your hands, especially if you’re buying an older property.
Find out more about the different levels of home buyers surveys.
Do I need planning permission for renovations?
You don’t need planning permission for most internal renovations, with things such as loft and garage conversions, bathroom and kitchen renovations, new staircases and rewiring usually covered by permitted development regulations. These often also cover adding extensions within certain limits – which depend on what type of property you have – while you can also build a garage, replace windows and doors, pave your driveway and put up gates and walls. There may be conditions or limitations attached though, while you need to ensure you comply with party wall agreements, so it’s obviously worth checking what you plan to do before commencing work.
If you don't get the required planning permission, when it comes to sell you may need to get indemnity insurance. Therefore, it's always best to double check what permissions your renovations need beforehand.
Positives and negatives of buying a fixer upper
Pros
Buying a renovation property can be much cheaper
Can add significant value to your home
Great for achieving the exact specifications you want
Can save money by doing some of the work yourself
Cons
Renovation costs can increase after work’s started
Timescales can also be put back
Doing work yourself can be very demanding
Can be tougher to get a mortgage on a fixer upper
Whether you decide that buying a project house is for you, or you go for a property that’s ready to move into, you’ll need to go through the usual process of arranging a mortgage and instructing a solicitor to carry out the legal work on your behalf. For more information on how things work when buying a home, don’t miss our comprehensive conveyancing guide, which you can download as a PDF.
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