A trait of a booming market is the desire of buyers to find a bargain by seeking our properties that need renovation or redevelopment.
‘Renovators delights’ are often seen as a great way into the market for investors, property developers and first-time buyers.
But unless you’ve spent time researching your target property and have experience at building or trades, your prospective purchase can be riskier than anticipated.
Older buildings can be subjected to all sorts of rules to preserve their character. You might be prevented from altering the original form of the building, and there could be restrictions on materials and colours or the cost of renovating could be higher than simply knocking it down and starting again.
To avoid making a costly error, here are a few actions you should take.
- Before making an offer, go to the local council to see if any issues might affect its redevelopment or major renovations. Ask about whether there are any rules around modernising the building, as this may affect the character of the area. It is also highly likely to affect your budget for upgrading it.
- Understand the property’s history. Has it always been a residential site? Has the land ever been zoned for commercial purposes? If so, you may need to look more carefully at issues such as soil contamination.
- With apartments, are you thinking of buying in a mixed-use building – that is, one that includes retail or office space? If so, you should ask about local area zoning plans to understand how the area is likely to develop in the years ahead.
- Always do a building inspection – it will help you understand the work you absolutely need to focus on. It can also help to bring your builder with you to an inspection and get their opinion and a quote on how much it will cost to restore before you put your offer in.
- How much will it cost to renovate versus how much will it cost to demolish and completely rebuild? It’s worth knowing this as a comparison. It is relatively easy to find out from house and land builders how much a new home will cost and many have knock-down and rebuild options that will make getting a quote fairly straightforward.