Finding a rundown property, buying it cheaply, doing it up, and then either living there or selling it for a profit is a dream for a lot of people on a low budget that allows them to finally own their own bricks and mortar. If you choose the property wisely, such as buying in a good location and stick to your budget for renovations, this can be a great way to get your foot on the property ladder. However, there are some pros and cons to flipping a home, and it can be hard to know where to start if you’re a first-time buyer.
Where And How To Find a Rundown House To Buy
There are a few ways to find a home in dire need of some TLC. You can search online, talk to estate agents, or looking around for probate properties. A probate property is a house that belonged to someone that has died recently, so this can feel morbid, but is a legitimate strategy.
The first thing you should do is talk to a local solicitor or asset management company to see if they have any probate properties available for sale. In a lot of cases, these properties haven’t been modernised and can be pretty rundown. If you ask, you may find they are selling these properties but you can’t find them online. This could be because they don’t want to include images of these properties in their advertising so they don’t spoil the aesthetic of their website.
The best bet to find a suitable property for your needs and budget is to look around a lot. Finding an affordable home that needs renovation is often a numbers game. The more estate agents, auctions or friends in the sector you have or loot at, the more likely you are to find the right property. As well as this, the more properties you look at, the better you will get at spotting some hidden gems that could turn you a tidy profit. Online property websites or local newspapers are worth looking at, as a lot of homes are listed here. Don’t forget to check specialist sites too, like sites aimed at renovation projects. You can also look for repossessed homes online and buy these at a good price as long as you have the funds available. Another good trick is to look for a property that is ‘off-market’.
It might surprise you to know that are a lot of properties that get sold ‘off-market’. This means they aren’t advertised on property websites. The only way to find out about these properties is usually through a local estate agent or by doing your own detective work to find out who owns a property. If you’ve spotted a property you like the look of that appears to be abandoned, start with the Land Registry website, which can be used to find the current owner, when they bought it, and for how much.
Ex-local authority properties are often a good option for development as they tend to be well-constructed but have often been a little neglected. Buyers should be aware of some restrictions that lenders might have relating to properties like this, esp[ecially concrete builders over a certain number of floors.
How To Buy A Property At Auction
Property auctions are also a great way to find a renovation project. They can be a quick way of getting rid of a property, so you will often find a lot of unloved properties are sold this way. Do some research first. Most auction houses should release a catalogue of properties that they have available about a month before the auction takes place. Each home should have a guide price and a reserve price, but these can be changeable up until the day before the sale, so keep updated. You can also put a bid on a property before the auction, but this can be risky. It shows you’re interested, which could push up the price.
Don’t just walk in and put a bid down on the property that looks like the best one. Do your research and read the small print. How much do other properties in the area sell for? How much could you stand to make if you did up the house and sold it or rented it out? Does it have any major issues, like needing termite inspection pest control. Is the property worth it? How does the market look? Will you be able to sell it after you’ve done the renovation work?
Wherever you decide to look for houses to fix up and sell on, you need to have a strategy. A lot of lenders have raised their loan to value thresholds in response to the pandemic, which could make it a bit more difficult to sell on a property after you have put in the work to do it up. The demand for housing isn’t going anywhere, but economic insecurity can still make it harder for sellers. This means you need a strong strategy. Don’t forget to do a full survey on the property and get a legal pack from the seller for your solicitors to check over too.
Pros Of Buying A Rundown Property To Renovate
- You get a blank canvas of a property that you can really put your mark on.
- Not everyone has the vision, time, or desire to renovate a whole property, so it can be less competitive than buying a property that was recently refurbished.
- For those with a lower budget, it can be a good way to get onto the property ladder.
Cons Of Buying A Rundown Property To Renovate
- Some property knowledge is usually needed to better understand the costs involved with a renovation project.
- Renovations are time-consuming and can take up a lot of your time.
- If the renovation project needs a lot of work, you won’t be able to live there, and you might therefore have to rent a property to live in while also paying the mortgage on the property that you’re doing up.