Buying up a rundown property may seem like the perfect opportunity to secure a home at a lower price, and the potential sell it on again at a profit.
But there are some key steps that buyers need to follow if they are to make such a project a success for there are many potential pitfalls along the way.
Here, MailOnline Property reveals the top five ways to ensure your DIY property dreams prove to be a worthwhile decision, with the help of the industry body for estate agents, NAEA Propertymark.
This three-bedroom semi-detached house in Cricket Road, Oxford, is for sale for ¬£375,000 via estate agents Chamberlain Evans
The Oxford property is in need of some updating due to the old carpets and fireplace
They include how to choose the best location and what you need to consider when drawing up a budget.¬†
Mark Hayward, chief executive of NAEA Propertymark, said: ‘Buying a fixer upper can be attractive, but is a decision not to be taken lightly.
‘To ensure the process remains as smooth as possible, buyers should consider important points such as the length of time they can commit to and how much they’re willing to spend.’
This five-bedroom semi-detached house in Barrow-In-Furness, Cumbria, is for sale for ¬£349,000 via estate agents Corrie and Co
The Cumbrian property has some lovely features such as the large bay window but may require an overhaul in terms of decoration
Adding value: The tired bathroom needs changing to provide a fresh look
The hallway could be redecorated to highlight some of the impressive original features¬†
The dated paint colours and carpets could be replaced to make the most of the property
His views were supported by financial experts, with¬†Jonathan Harris, director of mortgage broker Anderson Harris, saying: ‘Homes in need of renovation or refurbishment where a buyer can really make their mark and add some value, are always popular. But it’s important to appreciate your limitations, both in terms of time and budget.
‘Don’t overstretch yourself, taking on too big a project which you would then struggle to fit in around your day job. And ensure your budget is realistic – many people end up significantly overspending, wiping out any potential ‘profit’. It is worth seeking professional advice in order to avoid making a costly mistake.’
The old adage that you need to ‘buy the worst house on the best street’ shouldn’t be forgotten if you’re looking to make money in property, according to the NAEA Propertymark’s Mr Hayward.
This is because location is key to making sure your property will sell in the future. You can have the best presented house in the street but if it isn’t in the right location – such as in the right school catchment area or within commuting distance to a nearby town – it will limit the number of people who consider it to be a good potential purchase.
Minor cosmetic improvements such as painting, replacing windows and refreshing the kitchen may be all that is required if your budget and time is limited.
‘Ultimately, it will depend on your situation. If you’re hoping to complete the work as soon as you can, you might not want to tackle a home requiring major renovation to make it liveable,’ explained Mr Hayward.
This three-bedroom terrace house in Croydon, south London, is on the market for ¬£375,000 via estate agents home2u
Experts claim it is worth hiring an independent surveyor if you’re thinking about undertaking a renovation project
Make sure you have the budget to do the works required
Before making a purchase, a thorough budget needs to be drawn up to ensure there are sufficient funds available to carry out the required improvements.
This will mean finding contractors who can join you at a viewing, so that they can provide a quote. And don’t forget to work out what supplies are required and how much they will cost.
But perhaps the biggest potential pitfall is forgetting to add a contingency fund into the budget.
Mr Hayward said: ‘Always remember to add on a buffer to the total amount in case any unexpected costs pop up.’
Some homebuyers believe that a mortgage lender’s valuation report is a comprehensive home survey.
However, if you’re purchasing a fixer upper, you’ll need to employ a surveyor to act completely on your behalf and give you impartial advice on the property, suggests NAEA Propertymark.
Although you can save money buyer a doer upper, issues can pop up along the way that can push a project’s timeline back. This can end up costing more money than anticipated.
Mr Hayward explained: ‘Consider the pros and cons of the purchase beforehand and if you go ahead, remain committed throughout, as it might be hard work but it’ll be worth it at the end.’
If you are selling your home you need to make it look as good as possible.
And that starts before you welcome any potential buyers through the door, as to even get them to consider visiting it needs to look great in estate agent’s photos.
In a world where people go online to hunt for properties, how can you do that? In this excerpt from the This is Money podcast we give sellers some tips to make their home shine.