So you’re researching property investment, and you feel ready to start your journey. That’s excellent, and beginning your investment portfolio is always exciting! You’ve got the choice between investing in new builds, starting a renovation project, or sourcing property to rent out as a landlord! Still, the question remains, where should you choose to create […]Continue Reading
Are Properties Needing Refurbishment Worth It?
Property development opportunities can arise with every type of building imaginable. Whether you’re looking for commercial properties, buy-to-lets or student accommodation, there is no shortage of deals to consider. Yet these buildings aren’t guaranteed to be in perfect condition, and property refurbishment works could multiply the profit you’ll see from your investment. The big question is are properties needing refurbishment worth it? Are the extra profits worth the hassle of a building project?
We’d say definitely, yes! When you have the time and the expertise, properties needing refurbishment can be an incredibly rewarding investment. In case you need any convincing, here are the pros and cons of investing in properties needing refurbishment to help you decide!
Cheaper Initial Investment
Properties on the market that require renovation won’t be asking for the same price as the finished product would cost. Prices are lowered to compensate for the time that renovation will take, so you’ll be risking less upfront financially on the deal. Reduced initial costs make properties needing refurbishment affordable even for first-time investors, so you can start building your portfolio with less spare cash.
More Creative Control
Rather than finding a property that you like the look of from the very beginning, you can refurbish your property to your style. Control over your building’s features makes property management more straightforward, since you can install reliable appliances and sturdy units in the bathroom and the kitchen. Properties with older fittings are more likely to need regular repair.
Potential to Add Value
Bringing your property up to date and refreshing the kitchen and bathroom could add thousands in value to your building’s total price. Your renovation works could cost one-quarter of the value that you add to your investment, so you’re making massive margins of profit. If a refurbished property is your first investment, you could walk away with invaluable experience, and much more cash than you’d started with.
Hard to Budget
Once you begin renovating a property, you can uncover issues that require more budget. For example, you may strip old wallpaper to find damp patches and crumbling plaster! What you believed would be a new decorating job could immediately turn into a structural repair job, and that can prove costly. If your budget is tight, you can quickly spend more money than you’d anticipated on your refurbishment. With the help of a property investment consultancy, this is less likely since they will thoroughly screen properties before promoting them.
Refurbishment Costs Time
Depending on the complexity of works that need completing, a refurbishment can cost as much time as money. The length of building works will determine how quickly you see your investment return, but it’s almost sure that you won’t see a speedy profit. You’ll also need plenty of spare time to spend on managing your building works, and finding suitable tradespeople.
Not only do you need to determine where you’re going to put your budget and what you’re going to change, but you’re also responsible for employing suitable tradespeople. Any failures in building works will fall straight onto your shoulders, so you’ve got the stress of project management to consider too. It’ll be down to you to ensure that your refurbishment is progressing quickly enough, and that all work is to a suitable standard.
Are properties needing refurbishment worth it? When you have the time, and the property is in the perfect location, then without a doubt! If you don’t need to see a quick profit and you want to dedicate more effort to your project, you’ll find renovation properties a worthwhile and rewarding investment. Equally, if you’re looking to start building your portfolio with cheaper starting costs, a refurbishment project is perfect.
For help finding your perfect investment opportunity, contact us at Blue Skies Property Investment.
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