Making rundown property buy worthwhile

Posted on: 2018-10-04


Everyone looking to buy a house wants a cheap landed property in a good location.

A double-storey house or a semi-detached home priced below RM1 million hardly exists anymore in Kuala Lumpur or Petaling Jaya, unless if you are looking at buying a rundown one.

The asking price for a rundown property in deplorable conditions is usually below that of the market. It could be RM50,000 to RM100,000 cheaper than the neighbouring properties but it depends on how bad its conditions really are.

Such properties are typically bad investment. Not only they pose health hazards, you will also have to spend a lot to renovate them.

But if you are going to stay at the place for long term or if you are planning to re-sell the property at a higher asking price, then the investment is necessary.

Some rundown properties can make for excellent renovation projects and are therefore hugely attractive to potential buyers. You may find that renovating such property gives you the opportunity of not only making a quick sale, but also earning a higher profit.

However, you don’t always have to spend a lot of money refurbishing or retrofitting the place to make it attractive.

Firstly, before you start, make sure you have the budget to do the works required.
Never rush in to a renovation project as it may burn a hole in your pocket. Take into account costs and time frames. Plan what you want to do carefully.

If the property which you have just bought needs large-scale renovation, you will need a trusted architect, or contractor to propose a plan and offer a bid.

The contractor will need to take down unwanted things like cabinets, appliances, fixtures, tiles and moldings, or pull up floorboards or carpeting. The contractor will also need to sort out the roof, as well as plumbing and electric work.

To lower the cost, you can purchase your own materials. Tiles, cabinetry, bathroom and kitchen fixtures, doors, carpets and paint are some of the things you can pick yourself from DIY shops, antique stores and flea markets, or you can buy them from second-hand online websites.

Don’t make a common mistake like not ordering enough of something, or ordering a material before it’s ready to be installed in the home. Buying loose items separately will cost more!

MAKING YOUR OLD HOME NEW

MailOnline Property recently revealed the top five ways to ensure your DIY property dreams become a worthwhile decision, with the help of Mark Hayward, chief executive of NAEA Propertymark, the United Kingdom’s leading industry body for estate agents.

1. Location, location, location

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 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.

2. Renovation versus cosmetic improvements

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,” said Hayward.

3. Be clear on budget

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 howmuch they will cost. But perhaps the biggest potential pitfall is forgetting to add a contingency fund into the budget.

Hayward said: “Always remember to add on a buffer to the total amount in case any unexpected costs pop up.”

4. Get a survey

Some house buyers 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.

5. Be committed

Although you can save money buying 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.

Hayward said: “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.



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Source From: News Straits Times

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