Renovation to raise valuation

McNeely

Hello,

We're hoping to buy a house that needs renovating and extending. We have some cash, but will need to take out a home improvement loan of some kind. To do this, we'll need to use the cash to raise the property value, before applying for the loan. So, what is the best way to spend the money? What repairs or renovations raise property value the most?

About the house: a 1950 bungalow semi, original bathroom and "kitchen" if you can call it that. No structural damage. Small two-bed (54 square metres) on lots of land. Ancient boiler, all wiring and heating-plumbing is visible. Needs paint and flooring of course.

Budget before loan: £15k.

Landofwood

Kitchens and bathrooms add the most value. But no point doing them til you've done the basics.

Replumb, upgrade heating, rewire, replaster.

We're currently renovating an old Edwardian property, it's rewarding but frustrating!

Immers7

Make sure you look at what prices renovated properties are selling for in the area. There are plenty of people who have overpaid for a property needing renovation. There a lot of people who think they can do this.

DTDfanBoy

How much equity do you have in the property, if you've only scraped together 5 or 10% to purchase the property you'll probably struggle to produce a big enough increase in property value to satisfy your mortgage lender and whoever you are seeking a secured loan from.

alright_dave

You might as well do the lot. I've just done the same, 2 bed mid terrace. It feels like you are making little progress, then within a month it's complete.

re: bathrooms, buy a basic/cheap/plain suite and buy nice taps and tiles. They make the room. It's the same with the kitchen. I got basic units and fitted a nice work top, nice handles, nice tap, nice tiles.

Try and do as much as possible yourself. Things like JG Speedfit, make plumbing a house easy for even the most basic DIY-er. Watch youtube videos for tips. I'd never done skirting or tiling before, but I got some tips from youtube, and honestly people can't believe I've done the work myself it is that good. I've surprised myself.

Spend money on tools, just having the right tools can make a job so much easier, I'd say you could get almost everything apart from specialized stuff for about a grand. Circular saw, impact driver, combi drill, drill, angle grinder. Avoid buying things like mitre saws, the cheap ones are terrible and the good ones are stupidly expensive.

eddddy

In many areas, it's quite difficult to 'make a profit' out of renovation.

A good option might be to extend to provide another bedroom (perhaps a new master bedroom with ensuite). A 3 bed bungalow will clearly be worth more than a 2 bed.

But you often won't get back the money you've spent on cosmetic improvements - you tend to do these to end up with a house you like living in, rather than to increase it's value.


Or if it's a 'tatty' 2 bed bungalow on a large plot, is there scope to get planning consent to demolish and build a large house, or even a pair of houses?

AlexMac

Subscribe for a year to http://www.homebuilding.co.uk/ (inspirational property renovator !!!!!!!) then add a single storey addition within permitted development to get a big but cheap and well-designed kitchen, and do the other basics; bathroom(s), heating, decent flooring...

But don't go way above the 'ceiling price' for the street or area;

you can spend £25k in a street where houses average £125k and it will still be only worth an extra £10k so you'll have 'wasted' £15k. Whereas if you buy the worst house in a street at £150k where better presented or extended places average £200k, your £25k investment may bring you £25k 'profit' .

McNeely

DTDfanBoy wrote: »

How much equity do you have in the property, if you've only scraped together 5 or 10% to purchase the property you'll probably struggle to produce a big enough increase in property value to satisfy your mortgage lender and whoever you are seeking a secured loan from.

Yes, that's part of the problem. It would be 10%.

McNeely

eddddy wrote: »

In many areas, it's quite difficult to 'make a profit' out of renovation.

A good option might be to extend to provide another bedroom (perhaps a new master bedroom with ensuite). A 3 bed bungalow will clearly be worth more than a 2 bed.

But you often won't get back the money you've spent on cosmetic improvements - you tend to do these to end up with a house you like living in, rather than to increase it's value.


Or if it's a 'tatty' 2 bed bungalow on a large plot, is there scope to get planning consent to demolish and build a large house, or even a pair of houses?

Some good ideas here. The goal isn't to "make a profit" per se, but to raise the valuation so that we can free up equity to build further… eventually making a house we'd like to live in.

McNeely

Just heard that the bidding on the house has gone past our price range anyway. But now that it's a hypothetical question, and might still be relevant to another property…. Any other ideas about what renovations do the most to raise the property valuation on a neglected old house?

Thrugelmir

Buy a property you want to make a home. To make money. Pay as little interest as possible. Do as much of the work as you can yourselves. Spend as you go without borrowing.