Redeveloping property can be one of the most rewarding investments, transforming old buildings into dream homes or high-end investments. But not all homes are alike in terms of redevelopment possibilities. Whether you’re a seasoned investor or a rookie homebuyer, you need to know what to look for. Read on for a comprehensive guide to what to look for when searching for a redevelopment property with high redevelopment potential.
1. Locate the Worst House in the Best Location
Location is and always will be everything in real estate. A home in a good area, even if it needs fixing, is generally a gem in the rough. The concept is straightforward: you can alter nearly all else about a home, but not where it sits. Look for homes that are underpriced in good areas with good schools, proximity to mass transit, shopping districts, and other amenities.
Tip: Observe the current sale prices of recently revamped houses in the neighborhood to estimate their value after renovation.
2. Inspect for Good “Bones”
A house with good bones is an excellent starting point for remodeling. Some of the signs a house has good bones are:
- Good roof
- Good foundation
- Straight floors and walls
- Good drainage system
While cosmetic problems, such as old tiles or peeling paint, are cheap and relatively easy to repair, structural problems are costly. Have a professional inspect the house before making your move.
3. Prioritize Properties with an Elastic Floor Plan
Open plan living is where it’s at, and homes with fewer bearing walls are simpler to work on. Look for floor plans that can be readily tweaked to install bathrooms, open up kitchens, or enhance space flow.
Bonus: Unoccupied attics or basements can be turned into functional living spaces without needing too much structural effort.
4. Be Cautious of Cosmetic Blunders
Things that are ugly in themselves delaminating paint, dirty carpets, and outdated kitchens, will repel potential buyers at the first level. But these will usually be cheap to fix and provide renovators with a golden chance. A new coat of paint, new flooring, and new fixtures can make a big difference without costing too much.
5. Look out for Planning Permission Opportunities
Occasionally, the real potential is beyond the present footprint of the house. Investigate whether the land itself can be utilized for extension, loft conversion, or further dwellings (such as garden flats). Your local planners or a competent architect can advise on possibilities.
6. Watch Out for Deal Breakers
While great renovation potential is great, beware of properties with:
- Substantial structural damage
- Asbestos
- Japanese knotweed
- Legal issues or ambiguous title deeds
They can rapidly transform a good renovation into a money pit.
7. Do the Math: Renovation Budget vs. Return On Investment (ROI)
Before taking the plunge, do the math:
- Purchase price
- Renovation estimate costs
- Holding costs (e.g., mortgage, insurance, utilities)
- Potential resale or rental income
Ensure that the potential return on investment is justified by the expense. Build a buffer into your budget to allow for unforeseen surprises.
In conclusion
It requires a dash of art, a dash of science to identify a property with enormous renovation value. By being sensitive to design potential and good financial analysis, you’re able to identify the gems that others miss. Properties Everywhere Ltd is passionate about enabling our clients to look beyond what is, because far too often, the highest value resides in assets yet to be reimagined anew.
Having trouble finding a building to renovate? Contact us today and let’s discuss the possibilities.
