Tue09252018

Last update12:12:22 PM

Back You are here: Home Property Building and Renovating Buy, Renovate and Sell

Buy, Renovate and Sell

Many buyers look to purchase a run down old Bulgarian property, renovate it and resell it, hoping naturally to make a profit. Driving in the Bulgarian countryside or through any of the small villages you'll find a whole stack of old buildings in need of renovation.

The British have long been advocates of renovation and usually do a great job in bringing back these buildings to their former glory in a sympathetic manner.

Quest Bulgaria takes a look at the best way to approach buying a renovation project with the intention of resale.

 

Is it for you?

It is certainly a great way to buy property cheaply and then add on value with improvements. However, the key is not to take on more than you can handle. If you are taking on a massive project, how much of it can you do yourself? The more you can do, the more likely you are to make a profit. Can you do the design, source and transport materials, as well as managing a team of builders? We would not recommend you take on such a project unless you can be on site to make sure things go smoothly.

Can I make a profit?

In essence, yes. Make sure you buy in the right location and you buy the right type of property. What you really need is a well sited character property which you can turn into a quality home for potential buyers. Of course, you should not 'over do' the renovation and improvements which you undertake, otherwise you'll blow your budget.

Starting out...

Research, research, research. Check out the property market in the area you want to buy carefully and get a feel for the right price to pay. Also, think about who your potential buyers are likely to be and what needs they will have. This will help you choose a property best suited to your purchasers needs. You are better off buying a smaller property in a good location than a larger property in a poor location.

Watch out about access as there will be nothing worse if you find you can't get the lorry up to the house when the work starts.

How big a project?

What can you realistically manage and how much help you need are important questions to ask yourself. Very often it is easier to start with an empty shell rather than a property which is half done. Consider all this before you even start looking for a suitable property.

The maths

Work out your budget. Add in the additional purchase fees, lawyer costs, etc. Plus any other fees, such as architects and planning permissions. Either get a quote from a reputable builder for materials, labour and equipment or do the sums for yourself. Then add on a contingency figure of a minimum of 10% to the whole lot.

From this, you should then estimate the price you want to sell at, less any commissions and less any tax on the capital gain. From these figures, you'll see what your likely profit will be.

Slow down

Whatever you do, don't be rushed into buying the property. Take your time and visit as frequently as you need. Take all the photos and measurements you require as you'll need these to do a property costed plan of the whole project before you decide to buy. If your project will need planning permission, get a clause written into the preliminary contract that your purchase is subject to this.


 

It's the details that count

You'll need full 'to scale' plans as the planning stage is the most critical. Also do plumbing and electrical plans. With a complete finished plan before any work starts will eliminate expensive mistakes. These plans will also ensure that work is done in the right order.

If you are going to have to submit plans to the local authorities, get professional help. It is often worthwhile having a meeting with them before you start to check that what you want to do is within their rules. Better to ask now than have plans rejected.

Builders

If you are going to employ builders or a project manager, do check out the quality of their work and get in touch with past clients if you can. Get all quotes in writing, together with a timeframe of the work to be undertaken and a payment plan. There should be penalties for late completion - but on the other hand, you could add in a clause for a bonus if they finish early?

Money

With a renovation project it is all too easy to see the money slipping away. It is really tempting to splurge on extras, particularly fixtures and fittings. Think carefully about where you allocate your money for maximum effect. When considering decoration, neutral is best - it is usually brighter and most buyers won't object as they can then make up their own mind about colour.

 

Towards the end

Once all the works are finished, don't forget to "snag" the property. This is a step often overlooked with self-renovations but is critical to the future sale. Tip - if you can affford to furnish the house, do so as it is much easier to sell a furnished property than one with empty rooms.

Finally...

Contact agents to value the property. You can place your own advertising and endeavour to sell privately or sell through an agent(s). Either method can work.

A last thought - get a photo album together showing all the works undertaken and progress. Buyers love to see how the property was transformed from ruin to comfy home.