Renovation projects take time and money but they are incredibly rewarding when they're completed. Not only do you have the satisfaction of finishing a property to a high standard, but you can also generate large profits when you sell.
There are many exciting reasons to consider buying a project house to renovate, from profit potential to creating a totally unique home. Here are 10 reasons to invest in a fixer upper – and it’s not all about money, either.
1. Buy bigger
Renovation projects are usually sold below market price, to account for the expensive work required to bring the property back up to standard. This means you may be able to afford a much larger property than you expected, on a smaller budget.
Of course, you need to factor in the costs of renovations, but this usually falls below the market price of the completed property.
2. Live in a better area
A house in need of some TLC may mean you can afford to buy in an area that's otherwise out of your budget. Auction properties can be a way to buy a house in your dream neighbourhood.
You may need to compromise on property size if you want to live in a more desirable area. Property prices will naturally be higher for popular areas, which means a renovation project will involve a higher outlay for a smaller house. You would be able to get more house for your money in less desirable areas.
However, if the area you live in is number one on your ‘must-have to move’ list, this is a great way to settle in your favourite suburb or countryside village.
3. Buy a house faster with auction processes
Buying a house is a lengthy process and time isn’t a luxury everyone has. Both traditional auctions and the Modern Method mean you’ll secure the property on the day of the auction and complete the sale within 28 days.
The Modern Method of auction may allow an additional 28 days if you need to satisfy your mortgage provider’s requirements before you can complete the purchase.
Either way, you could be moving in to your property within just a few weeks of putting down your deposit.
4. Access renovation grants
Properties in need of certain renovations, such as improving energy efficiency, may be eligible for home improvement grants from the local council.
This means you may not have to invest as much of your own capital in fixing the property but can still benefit from the returns. Most of these grants are limited to owner-occupiers but there are some for landlords if, for example, disabled tenants require adaptations to the property.
5. Create you own vision
The most satisfying thing about buying a fixer upper is that it’s a blank canvas for you to develop as you wish. You can strip a property back to the bare walls, add extensions, redecorate every room and really make it your own.
Keep this in mind when viewing potential properties, too. For example, if the flow of space between rooms feels cluttered or nonsensical, consider removing or relocating interior walls. This can take a property from undesirable to must-have!
6. Build profit potential in several ways
Buying a fixer upper isn’t all about the money – but let’s face it, the financial side is definitely a big attraction factor.
A renovation project offers up a few ways for you to make a profit:
Sell for profit
You can do up a property to sell it as soon as it’s completed. If you keep a tight rein on your renovation budget, this can help to maximise the potential profit when it’s time to sell.
Rent it out
Another option is to renovate the property and then let it out to tenants. This is a great way to improve your cashflow or pay off your mortgage.
Remember, though, that if you’re buying with the intention of becoming a landlord you’ll need a different type of mortgage. Contact our experienced team in Nottingham on to find out more about buy-to-let mortgages.
Build a lifelong family home
You can profit by creating a lifelong family home that stays in the family for generations. Once any mortgage is paid off, your monthly cash flow will be even better. More than that, by not moving house again you’ll save thousands on mortgage, estate agent and conveyancing fees over your lifetime.
The profit here is also more than money: creating a hub that feels like home for everyone in the family is priceless.
7. Develop personal pride and satisfaction
Starting out with a rundown property and ending up with a high-quality finish that looks unrecognisable from the house you purchased is the best feeling in the world.
You’ll enjoy being in your home when it’s completed because you’ll have earned ‘sweat equity’: the time and effort you’ve put into turning a sorry-for-itself house into a home.
8. Live with confidence in a quality build
Buying a house means you never really know what previous owners have botched and bodged together in the past until it’s time to live in the property.
Doing your own renovation project means you’ll know exactly the time, money and effort that’s gone into creating a high-quality home. You know the quality of the finish is down to your keen eye for details and pride in creating a stunning home.
Even if you’re planning to let your home out or sell it on, good quality fittings and fixtures can help to maximise rental yield or sales profit, too.
9. Build your personal skillset
Project managing a renovation project is something to add to your CV. Coordinating tradespeople, budgeting your finances and choosing finishing touches all take a high degree of organisation.
You’ll also learn new things along the way, especially if you want to get hands-on and complete some of the work yourself. From learning how to plaster walls to realising you have a great talent for choosing interior décor colours, your list of personal skills is guaranteed to grow.
10. Bring the family closer together
Involving your family in the renovation project will help to bring everyone together and strengthen relationships. It’s not always going to be smooth sailing, as fixer uppers inevitably come with unforeseen glitches along the way.
However, working together to solve the problems and planning the future of the property with each other are great ways to deepen your personal satisfaction and well-being.
Learn more about mortgages for renovation properties
Financing your renovation project is a fine balance of your purchase budget and your renovation budget. There are lots of hidden costs, such as auction fees that you’ll need to factor in before you even get started on ripping out kitchen cupboards or restoring original floors.
Speak to a mortgage adviser to find out how to get a mortgage for a renovation property. Our mortgage advisers in Nottingham will be able to help you. Call them on 0115 9017146 to book an appointment and find out more.