While there is a shortage of new builds across the UK the reality is there are hundreds of thousands of neglected properties with no tenants. This is a fact which is often overlooked by the mass media but one which has caught the attention of many property investors across the country. Is there money renovating neglected properties?
There are obviously a number of factors to consider but the general consensus seems to be there is still significant money to be made renovating neglected properties if you invest wisely.
Location, location, location
Unfortunately you are unlikely to come across a “value” neglected property in some of the U.K.’s more prominent local property markets. You may come across a gem which is on the outskirts of a popular property market but even this may prove relatively costly. However, there are many areas of the UK which have good transport links to some of the larger cities and employment hotspots. Finding a neglected property to renovate in this type of area could prove to be extremely lucrative.
One thing which seems to hold many would-be property investors back from buying neglected properties is the fact they do not come along too often. Well, when we say they do not come along too often what we mean is value for money neglected properties will take research and time. However, do not dismiss this type of investment as it can prove to be extremely rewarding.
How much work is required?
If you have the contacts, the funds and the time to put into the renovation of a neglected property then you should seriously consider it. In many ways those which are borderline ready for the market will carry a significant premium compared to those which require significant work. If you are confident in your plans, pricing and you have the contacts or the experience yourself to carry out the renovations, then you should look towards the low priced end of the market.
The simple fact is that the more work required the cheaper the property and indeed there are many of these properties which are priced to sell across the country. It is possible to build up an impressive income from renovated property but it will take time. As more and more people want to make money overnight this is another factor as to why they are often priced relatively cheaply if significant work is required.
Do your research
There may be occasions when a property looks too good to be true and very often this can be the case. Do your research on a target property, do your research on the area and ensure that you have a realistic handle on the work required and the cost. You should also research the cost of property in that particular region because very often there will be a price ceiling on certain types of property in certain areas. There is no point renovating a property if this takes your total investment above the perceived ceiling in that region.
You may have to dig deep to find good value properties which require renovation but are available at attractive prices. These types of property do not appear on a daily basis and it may well be you find only a handful throughout the year. However, if you have done your homework as we have detailed above then there is no reason why you cannot create a significant long-term return.