Buying a property for refurbishment

Everyone wants their home to be a good financial investment. Whilst is great to have a brand new home you may be paying top prices. If the housing market drops you could find yourself in negative equity.

Another option is to buy a property to refurbish adding value by you improving the property and having the potential to deliver a good return on your capital invested. This all sounds very easy but you can get it wrong. If you are looking to buying a property see our buyers guide and information

Points to consider

To help you we have listed out some points that you need to consider when selecting a property for refurbishment.

Don’t buy what you don’t need. Depending on the condition of the property there will be many items which will need replacing or updating. For example you may have to replace the following;

What will it cost?

It is important that you value the property accordingly by taking the replacement costs into account otherwise, you could end up paying more than a new property.

Before buying a property draw up a schedule of what you will have to do to restore the property to your requirements. Then to the right of each item have two columns. Call the first column the ‘minimum requirements’ and the other the ‘nice to have’ column. Now price up the work in each column. This will give you two figure a minimum and a maximum cost which will help you to see if the project is going to be viable. If it does not stack up then forget the property.

Analyse every item of expenditure

If it does still look ok then carry out what is called a ‘Value Engineering ‘exercise on the schedule of work. That means going through every item and question if it needs to be done or if it does is there another way of doing it which will be cheaper.

Don’t forget to include a contingency item in your cost plan because you will find that there will be items of work which you have forgotten and other items they you would have under estimated.

If you have some expensive items on your list get quotations for the work . Ideally to ensure cost certainty for 80% of the work to give some level of confidence that the budget is about right.

This cost plan will be of great use when you are undertaking the project to ensure that costs are fully understood and can be monitored. [more on cost planning)

Programming the work

Once you have decide what work is required to be completed it is important to plan the tasks on a comprehensive programme. For each task you need to estimate how long it will take. What will be the lead in time to organize the task and are there any long delivery periods for materials.

Once all this information is known the tasks have to be coordinated with each other to ensure that the sequence is correct and that the work is completed in a logical order. For example if you need to have the floor boards up to install central heating and you also need to rewire the house then plan to take up the board once. Also you don’t want expensive finished work being damaged by dust from cutting masonry work. ( see section on Programming for an example and more detail)

Once the programme is complete it will be easy to see which items are critical. This is often called the ‘Critical Path’ of a programme and this path will govern the overall time it will take to complete the work.

The programme will now form an important role to first estimate the overall time to complete the project and help to estimate costs and monitor the work as it is being completed.

Also the programme will help to understand when the facilities will be available and this is vital if you are trying to live in a property while undertaking the work. A shorter programme will always be possible if you have the property vacant. You need to link some of these factors to the financial issues. A fast track programme may soak up the money but it may be an option you prefer to get things available more quickly. On the other hand you may be funding the work over a longer period which proves acceptable.

What work can you do yourself

You may also be restricted on the types of jobs you can complete. Obviously the more you can do the cheaper the project will result. However you do need to ensure that you have the skills to complete the tasks otherwise it is better that you sub out to those that do. Also if you start a job which you cannot complete then bear in mind experts may charge you a lot more if the work has to be corrected.

It is important to know that there will be items that you legally cannot do for example altering gas supplies this is a job for a CORGI registered Contractor. But for some of the other items of plumbing you may be able to do a lot yourself

If you need to brush up your skills have a look at our training guides.

It will be hard work and all the family needs to buy in
Finally whilst your completed refurbished home will be rewarding and satisfying don’t under estimate the time it will take. Think about how you would cope if you are taken ill or your day job just prevents you putting in the hours that are needed.

Your whole family need to buy into the project because every moment of your time will be used and they may get tired of not having full use of the facility. But the full result of your work could mean that you add thousands of pounds to your investment.

Check with the latest versions of Building Regs (Engalnd & Wales only) to see what you need permission for and what you can do your self