Popular culture has played a major role in encouraging more people than ever before to try their hand at ‘flipping’ homes and commercial properties. Interest in the “fixer-upper” properties is at an all-time high, as younger demographics in particular set their sights on building their dream homes for cheap or turning a comparatively quick profit.
However, experts continue to stress that the risks associated with purchasing fixer-upper properties must not be underestimated. More specifically, potential buyers are being advised to follow five essential guidelines before committing to the purchase of a property for renovation.
Arrange a comprehensive survey
It is always advisable to organise a more intensive building survey than would normally be conducted. This will ensure that you gain detailed insights into the renovations, repairs, and improvements necessary to restore the property to an appropriate standard. In addition, a detailed building survey could provide you with useful information as a basis for negotiating a more competitive price.
Consider financial products in advance
Do not make the mistake of waiting until the last minute to consider the funding options available. This is because properties that are considered uninhabitable may exclude you from most conventional high-street mortgages. Specialist property loans for fixer-upper properties are available, but they often call for independent broker support to access them. Fully research the options available ahead of time in order to ensure you understand what is on offer, how much you will be expected to offer as a down payment, and so on.
Factor the price of the property against the repairs required
This may also call for specialist help, as it may be difficult to accurately calculate the total costs of the renovations required without an experienced surveyor or contractor. It is essential to come up with an accurate total figure for the renovations and improvements you intend to carry out in order to determine whether the property is worth purchasing at its current price.
Anticipate the prospect of exceeding your budget
Research suggests that close to half of all fixer-upper property projects result in their buyers exceeding their budgets. You should therefore ensure you have some kind of backup plan available in the event that you run short on money at the worst possible time. This could be something as simple as putting off less urgent renovations until a later date or considering a mortgage extension if available.
Consult with an independent broker you can trust
Lastly, involving a reputable independent broker at the earliest possible stage is highly recommended. Along with helping you find the most competitive loan to fund the project, a broker can provide you with the independent advice and support you need to make a safe and informed decision.