Houses In Need Of Renovations Becoming Attractive To Homebuyers
Buying houses in need of repair has long been a popular investment strategy for property investors, but surprisingly there are growing numbers of home buyers in the UK who are purposely buying properties ripe for renovation as a future home.
According to research from Confused.com, 35 per cent of home buyers in the UK are buying properties in need of renovation because it was the only property they could afford to buy.
An average home in the UK currently costs £196, 829, while those who buy property in need of repair spend only £152,792. That’s £44,037 in savings but there’s a catch.
Although buyers are able to get savings in buying the structure of the house, this amount may actually go to the costs of fixing up the property.
26 per cent of homebuyers admit that they went over budget on their renovations and another 22 per cent shared that they might not buy a house using this strategy again. Based on the study, most homeowners spend £33,089 on the repairs, but 12 per cent of them are spending more than £50,000 on renovation costs.
Gareth Lane, an official from Confused.com, shared that more people will continue to look for cheap ways to buy property as long as property prices rise. But he also advised home buyers to think twice before buying properties which need extra work since renovations can be big projects that require extra patience and money to complete.
The risks seem gloomy but despite the considerations in cost and labor homeowners who concluded a successful renovation project stand a chance to increase the value of their renovated home by £25,000 to £50,000. Hence, there’s a lot to gain if you have the guts to take risk.
Rick Otton, an experienced property investor who often deals with below market value properties, shares a special investment strategy that homebuyers can also adapt to further increase the price of their newly renovated property.
“It always begins with the purchase price. Low priced houses offer bigger chances of capital gain. So make sure that you buy a house within an entry level suburb,” said Rick Otton.
He added that homebuyers shouldn’t just pick a house on a whim; instead buyers should be on the look-out for special features in the property. “It’s important to find a house that will give you an opportunity to create a special area- it could be an extra room, an extra outdoor area, or maybe you can even rearrange the floor plan,” he said.
I firmly believe that there’s no right or wrong way of buying properties, thus it’s very exciting for me to hear that more homebuyers are trying out unorthodox methods of buying property. What gets me even more excited is that fact that investment strategies are now being applied by regular buyers with very positive results. I hope this trend continues so more people will be benefitted by effective investment strategies.