Ask the Experts - Managing An Unmodernised Property Project on a Budget.
Kerr and Co's Guide to Managing a 'Doer Upper'
Buying a so-called unmodernised property or a ‘doer-upper’ can either be viewed by many of our clients as a great way of putting your own signature on a property. As energy efficiently and environment factors become more of social responsibility and a way of living, buying a house needing a complete overhaul are in high demand. For many of our home owners they are an opportunity to increase the carbon potential of the property and add value as well reducing costs and emissions.
But what exactly does a project like this involve ? - and
More importantly - What are the key factors you need to weigh up before taking on a property project ?
An 'un modernised' ‘doer-upper’ or ‘fixer-upper’ is a property that’s in need of repair or cosmetic enhancement – often with an aim to add value or make a profit and investment as a homeowner . With this in mind taking on property project requires a commitment of time, money and patience.
As in many investments there are pros and cons to a doer-upper just as there are for any other type of property so getting good solid advice is essential from your estate agent is key to getting the maximum from your investment and ensuring it has buyer appeal when the time comes sell.
Rule One - Buying at the right price.
Kerr and Co has over 30 years experience and knowledge in West London. We pleased to have advised hundreds of clients on their property purchases.
We have one golden rule for our clients - what you spend on buying your doer-upper can make or break the amount of value you’re able to add on the property once the work has completed. When assessing the value of a doer-upper, you should ask the advice from property professionals, your estate agent and surveyor are key and knowledgable so can guide you to what the true worth of the property is and is potential resale.
- Competition for doer-uppers can be fierce and if there’s a lot of interest in a particular property, you could end up paying more to secure it.
- Visit with your builder or architect for a second opinion, know what you plan to spend on renovations and be aware of how much work you can do yourself.
- Be clear on your finance, borrowings and budget as these can change significantly over the length of the project.
Rule Two - Widen your search area
- By taking on a doer-upper, you may be able to afford to buy in an area that would normally be out of reach for you financially.
- Widen your search area initially when looking for a doer-upper project and weigh up the best locations that meet your needs.
- If you’re buying a doer-upper to live in for a long period of time, buying in a traditionally more expensive area could be the right option for you.
- But if you’re looking to make a quick profit from a ‘flip’ property, you’ll need to consider if you’ll be able to get back any extra money you spend buying the property through the renovation work you carry out.
Rule Three - Get involved to save money
One of the best ways to save money on a doer-upper project is getting involved and doing some of the work yourself,however be realistic in what you can do yourself, certain works and finishes such as gas and electrical work should always be carried out by licensed, professional people who can certify with a certificate to and a gurantee for all works carried out .
Work that you can get involved in include
- Painting and decorating
- Tiling and grouting
- Flat pack furniture installation
- Laying wood flooring
Rule 4 Stay on top of your budget
One of the most difficult things to do with any doer-upper or modernising any property is staying within your budget. At the moment with the increased cost of labour and materials prices have risen and budgeting for the unexpected is more important than ever. The key to staying within your budget is preparation, research, shopping around and making compromises. However, with energy efficiency becoming more important to both the local and national environment there are a number of government incentives like grants and and government incentives which can help.
- Be clear on what your project will cost before any work begins
- Know how much work you will do yourself
- Add a comfortable, affordable ‘buffer’ to your overall budget to cover any additional or unexpected costs once work begins
Rule 5. Consider buying at Auction
Unmodernised properties often come up for sale at property auctions and can be a great way to pick up a good property which hasn't been on the market for a long time. Properties sold through auction, however, require a different approach and are much faster transactions. If you are a homeowner you should be in a position to exchange and all your finances are in order.
- Have your finance in place before you attend an auction.
- Visit any properties you’re interested in before bidding, alongside studying legal packs - have a second option from a builder and solicitor to ensure there are no unknown surprises .
- Have a maximum budget in place for a purchase that you will not exceed and stick to it .
- Have your deposit ready to pay should you be a successful bidder
If you attend a live auction and make a successful bid, you’ll exchange contracts with the seller there and then, and will have to pay a 10% deposit. Under the Modern Method of auction, usually an online bidding event, you’ll pay a reservation fee immediately to secure a property, before having 28 days to exchange contracts and then a further 28 days to complete.
Rule 6 : Always use a Surveyor and Get a Survey
To best eliminate any nasty, costly surprises, always commission a full structural survey when buying a doer-upper.
A full survey will reveal any potential problems with the structure of a property that can’t always be seen with the naked eye.
Once you have all the information provided by a survey, you’ll be able to decide if you wish to proceed with the purchase.
7. Don’t forget about planning permission
If your doer-upper project requires major structural work, you may need planning permission.
Planning rules can vary from area to area, so if you find a property that you’re keen to buy, speak to the local authority planning department to establish whether you’ll need permission.
Some work may be able to be completed without planning approval, but properties in conservation areas or Areas of Outstanding Natural Beauty may be under an Article 4 direction, limiting permitted development rights.
What to look out for when buying a house to renovate
When viewing a doer-upper, try to leave all idealisim at the door and look at the property with a critical eye taking on board a building project can be finacially and emotionally draining so make sure you have the time to invest as well as the finanaces .
Other Factors to consider when buying a unmodernised property.
1. The standard of other properties in the street - Its often said
" buying the worst house in the best street is a perfect way to get a property in the road you want ".
- Look at other properties in the road make a note of what has been carried out and what have they done, look at planning applications in the road and what has been allowed.
- Investigate what the properties in the road have been sold for and is there a ceiling price for the area.Having all this information can help to make your decision and help you understand what you need to do to break even.which will make it much easier to understand whats involved.
2. The length of time the property has been on the market .
- Try to find out how long the unmodernised property you’re viewing has been on the market and whether it’s been reduced in price and if it could be open to more negotiaion. Sometimes properties which have been up for sale for a long time can sometimes be a red flag – potential buyers have discovered potentially costly problems.
3. Return on investment
Do plenty of research into the area where you’re considering buying your doer-upper.
- Find out about plans for the local area, including road improvements or potential development work nearby.
- Is the property you’re looking at near a sought-after school, or is it close to good transport links?
- All of these factors can play a part in increasing, or decreasing, your return on investment.
Kerr and Co have over 30 years experiance and knowledge in the West London Area - specialising in Shepherds Bush and Hammersmith - if you are looking to buy or sell in the future give us a call as we would be delighted to help with your property needs .
Call us on 0208 743 1166 or email us on email@example.com