If so, here are some things to consider before taking on your first project:
Do your research
If you’ve spotted a property, make sure you do your homework first. Check how long the property has been up for sale. If it’s for a lengthy period, it’s possible the profit returns may not be that high. Imagine you are buying the property for yourself, what would be the things that would be important you? The chances are your potential buyer will be looking for similar things. Bear the following in mind:
- How noisy is the area? Train-lines are just one example of a potential source of sleepless nights that your buyer or tenant may want to avoid. Check local websites for night-clubs, football stadiums, flight-paths, and even emergency services, those sirens might put people off.
- Find out the cost of living in the area. Do your homework with local authorities – council taxes vary enormously depending on band and district. A high monthly bill could put people off.
- Is your potential buyer likely to have a car? If so, is the garage is big enough to get into and leave room to open the doors – seriously! If the property only has on-street parking how easy is it to park? How secure are vehicles parked on the road? Go to upmystreet.com’s Local Area section where you can search by postcode for the latest police crime statistics & car theft break-ins.
- It’s impossible to guard completely against crime, but try walking around the area at pub closing time before you commit. Instincts are a good guide here – if you don’t feel safe, there’s probably a reason.
Ask the experts
Once you have identified a good opportunity, ask the experts for their advice on what needs doing. Roofers, timber and damp specialists and electricians will charge nothing or very little for an estimate, but their knowledge and pricing will be more beneficial to you than a surveyor in the initial stages.
How much work is involved?
This depends on the property, but don't bite off more than you can chew. An older property there will often require significant work. If not initially, there will be jobs to do once you have bought it. Don't be afraid to make a lot of visits with every type of tradesman in order to know what you're letting yourself in for!
For a good first experience of renovating, try doing up a dated property rather than a wreck. A new kitchen, bathroom, central heating, carpets and re-decoration will transform something dingy to desirable. You can always leave the architects, specialists and planning department to another time when confidence and funds are more plentiful.
Be prepared. Most people find that property development projects often end up costing twice as much as they initially thought. It is advisable to set yourself a budget and build in some contingency funding – 15 per cent of the total cost is a good guideline.
You could start your renovation with a small cash fund, and once you've re-decorated and carpeted, the overall improvement should allow a small re-mortgage. This can be used for a new kitchen and reinstating period features such as fireplaces.