How to identify a property renovation opportunity?
When in the quest for a property, many investors aren’t merely seeking a comfortable living space but rather a potential goldmine. If your grand plan involves acquiring a property to refurbish and enhance, many factors exist to ponder.
While this venture often promises a lucrative return on your investment, opting for a ‘fixer-upper’ isn’t an attractive project for everyone, and you might find yourself grappling with aspects you hadn’t initially envisaged.
Identifying a property with above-average investment potential can prove daunting, especially for first-time buyers embarking on their property journey. Hence, we’ve curated a checklist of key features to keep an eye out for, categorised based on the potential value they might inject if optimised effectively.
Expansion opportunities: Maximising space
The most significant scope to add value lies in augmenting the overall square footage for most properties. This could be achieved by extending the property, adding a conservatory or even constructing a secondary property on the same plot. Your primary focus should be unused outdoor space ripe for development.
Be on the lookout for:
- ‘Side returns’ on terraced properties, essentially a slender strip of garden nestled between the house and its neighbouring property.
- Ancillary structures, such as outhouses that could be annexed to the main property.
- Plots of land ripe for a summer house or garden room.
- Existing extensions or garages that could accommodate another storey.
- Neighbouring plots of land up for sale.
Bear in mind such transformations will typically require planning permission. Inspect nearby properties for similar completed projects to gauge the likelihood of obtaining this.
Spatial reconfiguration: Unlocking potential
The second most substantial avenue to add value is by creating more usable space within a property without expanding its footprint. This could involve repurposing a previously neglected area or reimagining the floor plan. Any additional living space is a bonus, but an extra bedroom will yield the most value.
Keep an eye out for:
- Unconverted garages, attics and basements with the potential to transform into a bedroom or reception room.
- Compact kitchens adjacent to larger dining or living rooms ideal for creating an open-plan living area.
- Smaller bedrooms next to considerably larger ones, which could be equalised by shifting an internal wall.
Remember, moving walls is only feasible if they’re not load-bearing, and not all garages, attics and basements are fit for conversion. Thus, consulting a surveyor to ascertain the feasibility of your envisioned alterations is advisable.
Functionality enhancements: Modernising and upgrading
When considering older properties, there’s often considerable scope to add value by modernising them or introducing newer, more efficient features.
Be vigilant for:
- Outdated kitchens and bathrooms ripe for upgrades with high-quality appliances, enhanced storage and appealing surfaces.
- Poor Energy Performance Certificate ratings that could be improved through various means, from upgrading the heating system to installing solar panels.
- Noise pollution from nearby roads, potentially mitigable with double glazing and sound insulation.
Although these upgrades can be somewhat costly relative to the value they add, you’ll also reap the rewards of these enhancements whilst residing in the property.
Aesthetic potential: The key to unlocking property value
In the realm of property investment, the potential for visual improvements is a golden nugget. By enhancing the aesthetic appeal of a property, you could significantly increase its value.
The secret sauce? Snagging a bargain by looking beyond features that other buyers might find unattractive, with the intention of transforming them once you move in.
Keep an eye out for:
- Restorable original features: Look for original elements such as wooden beams, fireplaces or floorboards. Though they may be in poor condition, their restoration can add unique charm and value.
- Outdated decor: Don’t be deterred by unusual or dated decor. These can be easily replaced or removed, making way for a more modern aesthetic.
- Exterior facelifts: Unappealing exteriors can be dramatically improved with clever solutions like cladding or climbing plants.
Navigating renovation: Balancing workload with ambition
The scale of work required on a property directly correlates with the potential to add value. However, it’s crucial not to overextend. Taking on a project that requires more time, funds or expertise than you have available can quickly become overwhelming. It’s essential to align the amount of work needed with your level of ambition.
Want to demystify your mortgage options?
Whether you’re looking to buy your first home or investing in property, we’re here to help. In recent years, mortgage lenders have tightened their belts and updated their lending rules and practices. Moreover, mortgage rates and deals constantly fluctuate as lenders vie to attract new clients. To discuss your options and navigate this ever-changing landscape, contact our team of expert advisers.
Please note: a mortgage is secured against your home or property. Your home or property may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.
