As a well know Structural Defects Insurance provider, CRL work with many self builders who look to create their own dream homes by buying a building plot. Equally we also work with many customers who look to buy properties in need of renovation and structural repair or alteration.
In both scenarios there are a common number of important steps when it comes to the buying process. They include:
1. Setting your search requirements
2. Carrying out the search
3. Dealing with the legal aspects of a purchase
4. Protecting your investment with Structural Insurance Cover
When it comes to carrying out the search for a building plot or a renovation property it is important to set realistic expectations and the best way to do that is by completing a simple questionnaire to realise what is important to you and also what is realistic for your situation.
Ask questions such as:
Purpose - Why do you need the land or the renovation property, is it an investment? If so what return do you need to make for it to be worthwhile? Is it a family home? If so how many people does it need to accommodate, what special or unusual facilities do the occupants need if any?
Use – A plot of land may be set in an idyllic location or a renovation property may be charming with bags of potential but it is important to use an equal amount of heart and head. Can the site fulfil all your needs? Are you willing to make compromises? It's best to know the answers to these questions up front so you are prepared when carrying out viewings and then you can avoid making an impulsive emotional decision.
Cost – Have you created a detailed budget, does it include all the associated fees of buying land or property, carrying out construction works or complying with the law? Remember to factor in a cost for architect drawings, surveys, insurance, materials, labour and importantly include a contingency – construction projects rarely come out exactly on budget and unforeseen problems could cause a significant jump in your costs.
Re-sale – Try to use online tools or ask local estate agents about the potential price a property could achieve in your search area when it is built or renovated. Each area usually has a ceiling price and it is a good guide to what your maximum spend should be to realise some equity in your property or at least break even.
Budget – Once you have worked out answers to all the above you should have an idea of what you can afford, if it leaves you short of the average cost of buying a plot of land in your area, or purchasing a renovation property you may need to consider other lending sources. Could family help you with a loan, have you explored all bank lending options?
Searching For Land or Renovation Properties
The typical routes for buying property such as high street estate agents and online property portals are an obvious starting point and can help you cover a lot of ground in a short space of time, but they are not the only option. Diversifying your search can pay dividends by unearthing new properties before they are listed online.
Property and land auctions are another good way to find both plots of land and renovation properties and because they are often sold as seen for a quick sale, there may be less competition for auction properties allowing you to make a saving. It is important to do as much research and due diligence on a property or site before bidding though, and don't be rushed into making a mistake just to save some money, because it could end up costing you a lot more in the long term.