Property 'in need of refurbishment'. Where to start?

dendof

As always I've been keeping my eye on different properties, seeing what sells etc. Lately I've seen one or two interesting properties that are in 'need of refurbishment'. Now the thing is, I wouldn't have a clue on where to start with figures on what it could cost. What would the best first steps be? Maybe ask a builder to throw his eye over it for a ballpark figure? Also, as I'd be a first time buyer, would a house that's not liveable in at present have any bearing on my mortgage application. Other things I'd wonder about would be how much to ask for. Should I ask for asking price of building plus renovations built in etc. Any advice from anyone that has been in a similar position would be greatly appreciated.

LowKeyReturn

Do a bit of research here, you should get some very rough ballpark figures. When you get the survey done you can also ask the surveyor to give you some ideas of cost.

Basically what I've come up with over the years but YMMV.

Kitchen 7 - 20K
Rewiring 5 - 10K + associated damage
Roof 10 - 25K
Bathroom 4 - 10K
Windows 1K per window

Decorating is very much however much you want to spend but can be done very well very cheaply especially if you DIY.

Victor

Don't go near a builder.

If a property appeals to you, get a property surveyor or quantity surveyor to do an inspection and ask them to put a price on upgrading it.

You will of course need to agree a standard of finish that you need - gold taps or cheapest available.

The banks will lend for improvements, but not necessarily for properties that need a huge amount of work. If they do, they will insist that you spend your share of the purchase price first, before you can draw down on the full mortgage. Ask the bank about their exact policies on this.

Talk to the bank about how much you might be able to borrow, based on your savings, income and commitments.

StillWaters

Victor wrote: »

Don't go near a builder.

I would challenge this advice Victor, in my experience, any builder who has survived the past 5 or so years (staying legit, I'm not talking black economy) has done so because they provide quality work and don't rip people off.
If you choose a builder on personal recommendation who has been in business a while, they can give you a good idea of what you are facing. It doesn't replace a decent structural survey of course.

Victor

The problem is that clients tend to be poor at conveying their needs to builders and builders go along with this, either naively or maliciously. It is to their advantage to suggest a low price at the start and work that up to a high price at the end.

Corron

dendof wrote: »

As always I've been keeping my eye on different properties, seeing what sells etc. Lately I've seen one or two interesting properties that are in 'need of refurbishment'. Now the thing is, I wouldn't have a clue on where to start with figures on what it could cost. What would the best first steps be? Maybe ask a builder to throw his eye over it for a ballpark figure? Also, as I'd be a first time buyer, would a house that's not liveable in at present have any bearing on my mortgage application. Other things I'd wonder about would be how much to ask for. Should I ask for asking price of building plus renovations built in etc. Any advice from anyone that has been in a similar position would be greatly appreciated.

I'm doing something similar at the moment! We have had a builder give an estimate on cost of work to help us decide on an offer based on our budget. He was happy to do this for free. Obviously if our offer is accepted we will have a structural survey done for more accurate costs. You have to pay over €300 for this, and we just can't justify this expense pre-offer!

Ray Palmer

Corron wrote: »

I'm doing something similar at the moment! We have had a builder give an estimate on cost of work to help us decide on an offer based on our budget. He was happy to do this for free. Obviously if our offer is accepted we will have a structural survey done for more accurate costs. You have to pay over €300 for this, and we just can't justify this expense pre-offer!

If you can't justify €300 then don't even bother. The builder quote is of little use because you have no idea what needs to be done. The builders quote could easily be grossly inaccurate. If you are basing any offer on it you might get a nasty surprise.

Corron

Ray Palmer wrote: »

If you can't justify €300 then don't even bother. The builder quote is of little use because you have no idea what needs to be done. The builders quote could easily be grossly inaccurate. If you are basing any offer on it you might get a nasty surprise.

I can more than justify €300 if I put an offer on the house. If there are major structural problems identified in the survey then I might have to reconsider my position. But as a first time buyer if I look at 5 houses - 5 surveys €1500 at least.

Pawwed Rig

I don't think there is value in a refurb at the moment.
There are properties available at low prices that need zero work before moving in so unless you are getting exceptional value on a doer upper I don't think it is worth the hassle given the uncertainty and the fact you are not doing the work yourself.

Corron

I grew up in a rural area and I would like the same for my family. In the area I want to live in the properties available at low prices that need zero work are in cramped estates. A house in a rural area is €400k plus. I can't see any other option than a refurb.

Pawwed Rig

Corron wrote: »

A house in a rural area is €400k plus. I can't see any other option than a refurb.

In Ireland????:eek:

Corron

In the rural areas near Dunshaughlin in Meath, yes. And we're looking closer to Navan to get a refurb property we can afford. A refurb property just outside Dunshaughlin €275,000. There's another on 3 acres for €500,000 and the house is just a shell.

Ray Palmer

Corron wrote: »

I can more than justify €300 if I put an offer on the house. If there are major structural problems identified in the survey then I might have to reconsider my position. But as a first time buyer if I look at 5 houses - 5 surveys €1500 at least.

Yeap always a danger but are you really going to be considering 5 houses to the extent of putting in an offer?

Corron

At the moment there are 2. But there are also a lack of affordable houses in the area. We have seen 10 houses 9 had offers on them already, danger of getting dragged into a bidding war. Chances are if we bid on those 2 houses we would be out bid eventually.

K.Flyer

To be honest, if you are unfamiliar with what is involved in a re-furb project and are at the mercy of whoever is doing the work for you I would advise that you budget at least 15 - 20% over all your estimated / quoted costs to give yourself some room incase of any unexpected problems.

the_syco

Corron wrote: »

There's another on 3 acres for €500,000 and the house is just a shell.

If it's a shell long enough, it'll probably cheaper to knock it down, and build it up from scratch, but is the land really worth €500k?

Corron

No I seriously doubt the land is worth €500k but that's what they want for it. There's a lot of over-priced properties in the area. I was in email contact with an auctioneer and he had sent me details on a few properties. When I told what he had sent were out of our budget and we were approved for €300k he didn't even bother to respond to me.

pistol_75

Hi guys,

Hope you don't mind me jumping in on this thread but it seems the most appropriate place to ask the question.

A property has come on my radar with an asking price c €150K which is in need of complete refurbishment. Will banks give you a mortgage based on the value of the house after it it refurbed, so to cover the cost of making it liveable or will they only offer based on the purchase price?

If this is the case how do people normally finance refurbs? Sale of our existing property would leave us in a break even situation from purchase price to outstanding mortgage. Obviously savings would cover some of it but not all.

the_syco

Corron wrote: »

No I seriously doubt the land is worth €500k but that's what they want for it. There's a lot of over-priced properties in the area. I was in email contact with an auctioneer and he had sent me details on a few properties. When I told what he had sent were out of our budget and we were approved for €300k he didn't even bother to respond to me.

I'm thinking that the €500k land was based on 2008 prices, and maybe was initially bought to be sold with the house for twice the price, but the bust killed that idea.

Maybe look at buying land "on condition that the land permission being given" to build a house?

Corron

pistol_75 wrote: »

Hi guys,

Hope you don't mind me jumping in on this thread but it seems the most appropriate place to ask the question.

A property has come on my radar with an asking price c €150K which is in need of complete refurbishment. Will banks give you a mortgage based on the value of the house after it it refurbed, so to cover the cost of making it liveable or will they only offer based on the purchase price?

If this is the case how do people normally finance refurbs? Sale of our existing property would leave us in a break even situation from purchase price to outstanding mortgage. Obviously savings would cover some of it but not all.

Look up killers1 on boards.ie He'll give you all the info you need on this!

The_Conductor

Corron wrote: »

A house in a rural area is €400k plus.

First of all- calling Dunshaughlin 'rural' is a bit a bit of a stretch- sure, its not a large town- but its a very pleasant area, close to the Navan road and with easy access to Maynooth/Leixlip/Lucan and of course Blanch and town inbound on the Navan road. When you say rural- I picture my Dad's home- at the foot of Knocknashee, a few miles off the N17, and a few miles from Tubbercurry. Thats rural in my books.

Secondly- 400k- seriously, someone somewhere is having a laugh. This pricetag is so surreal in the current environment- for a residential property outside of desireable areas of South Dublin. And this is a property that *needs* considerable work (from your brief description- it sounds like basically a shell, nothing more).

You need to get proper advice on this- from someone who doesn't have a vested interest in the property selling, or assisting you in purchasing it. Pop into a local estate agent in Maynooth (maybe Coonans) or Lucan (maybe McDonald brothers)- and pay them to pop over with you some evening and give it the once over.

It may be in a lovely location- but the pricetag just smacks of someone being very opportunistic or unrealistic- depending on your point of view.

Corron

I'm not that bad I said 'rural areas near Dunshaughlin'. I totally agree the pricetags are surreal but that's what they are asking for more than one property in the area! Thanks for the tip I never thought of asking an external agent to have a look! Think I'll give that ago!

the_syco

StillWaters wrote: »

I would challenge this advice Victor, in my experience, any builder who has survived the past 5 or so years (staying legit, I'm not talking black economy) has done so because they provide quality work and don't rip people off.

In essence, though, you're asking someone how many months work they want with a blank cheque.

The_Conductor

Get a surveyor to detail the work, on a schedule and assign fixed prices to each stage on the schedule- and get one or more contractors to bid on the various stages. Perhaps divide up the work between different agents/contractors- to leverage any perceived expertise that one has over another. Build penalties in the contracts- perhaps bonus payments for completion to certain standards, ahead of schedule, or financial penalties, if the work isn't up to scratch, or if it takes longer than scheduled to do (which will obviously impact on other work further down the line- you don't want electricians hanging around because the place isn't ready for wiring, or whatever).

You need to look at this logically- but you also need to safeguard yourself as far as is practicable- to ensure the work is done, to a high standard, on time and at a cost that you're satisfied with.

A good site manager is also worth their weight in gold- there are quite a few unemployed architects moonlighting as site managers at the moment- doing quite remarkably good jobs.

Don't pay anyone under the table- make sure all contracts have C2 tax compliant certs, and if you do not propose to take out your own site insurance policy- ensure they have their own cover.