Even though the property market is still extremely sporadic in terms of consistency of values, many people feel that this is the right time to buy. Whilst some people are sitting on the fence, not sure whether to buy, others are jumping at every opportunity possible.
During times like these, that are incredibly uncertain, some of the best bargains arise. If you are looking to renovate a property to either live in, or flip for a profit, then there are a few things that you might want to consider first.
As always, you should be checking the sale prices of properties in the area that have sold recently. Be sure to check that you are only looking at properties that are close by, but also similar. For example, a 4 bedroom house should not be compared with a 3 bedroom house.
Alongside this, you need to adjust the sale prices in line with the house price graphs available on the internet. For instance, if the sale price in 2010 was £100,000 and the prices have increased 5% and 3%; here is what you do.
You add 5% to £100,000 which is £105,000. You then add 3% to £105,000 which is £108,150. Note that this is slightly different in comparison to just adding 8%. This will make a much bigger difference if the figures you are looking at are 4-5 years old and the house value is much higher.
Each property is different to the next. Although you can make some basic comparisons, they are not always going to be completely accurate. For instance, one house might have a brand new kitchen, whereas the other house might have had a complete refurbishment.
One house might have included all fixtures and fittings and have a large garden, whereas another included none of the above and had a small garden. If possible, get the addresses of the houses you are looking at and try and drive by to see if you can gauge the quality of the property. What does your investment property have that this property does not, and visa versa!
Location is incredibly important. If you are flipping the property for a profit then you need a great location. For example, a 3-4 bedroom house is an obvious family home.
It is likely that they family has children and they will go to a school based on the catchment area of the property. So, which catchment area does this property fall under; a good or bad one? Are local shops close by? Can you here trains or main roads from the property? All of these small things will make a big different to the speed of the sale.
Cost Of Renovation
Before making an offer on a property, really spend some time digging through and seeing what needs to be done. A lot of property developers find that they lose out because they have not done their due diligence beforehand. For instance, they think that the exterior brickwork needs grit blasting, when really it needs cleaning and rendering. Things like this can quickly boost the cost of a renovation project.