Gone are the days when retirement meant coffee mornings and crochet. Now we have the freedom to enjoy the plans we’ve been looking forward to, travel to far-off places, and get around to starting hobbies that we haven’t had time for before. But have you thought about taking on something more ambitious – like a house renovation? In this article, we’re looking at buying property to renovate and sell in retirement. We’ll be sharing some advice for getting started, and pitfalls to avoid along the way.
House renovation can be a great investment, and a rewarding and exciting project. Whether you’re looking at buying a second house to renovate and sell, or renovating your own home to increase its value, our article will help you to get started.
If you’re looking for ways to cover the cost of your house renovation, a lifetime mortgage could help. In 2021 we saw a 134% increase in enquiries for equity release to undertake home improvements, compared to 2020. Available to homeowners aged 55 or over, a lifetime mortgage is a form of equity release that allows you to access tax-free cash from your home as a lump sum or a series of lump sums – great for helping you get to grips with your budget.
A lifetime mortgage is a loan secured against your home, that you won’t have to pay back until you pass away or move out of your home into long-term care. There may be cheaper ways to borrow money for your house renovation, but as you can only take out equity release through a qualified financial adviser, they’ll make sure it’s the right option for you and your project.
What are the benefits of buying a house to renovate and sell?
There are plenty of benefits to consider when you’re thinking about buying a property to renovate and sell. These include:
- Developing new skills – Fixing up a property is a great way to learn new skills, be it painting, carpentry or project management.
- Set your own hours – Unlike most jobs, you’re in charge of your hours – which comes with a lot of flexibility. It’s ideal if you have other commitments, or you can focus solely on this project.
- Return on investment – The average profit made from renovations in 2020 was nearly £41,000 – £10,000 more than in 2019. So all that hard work really could pay off!
Choosing where to buy property to renovate and sell
It might be tempting to buy a property in your local area. But looking further afield could mean more profit when it comes to selling, and the unfamiliar might prove more popular with families, or younger couples.
Here are a few other things to think about:
- What’s appealing about the local area? Is it the parks, forests, town centre or coastline? Look for standout features that could be attractive to future owners.
- Look at how much work the property needs – consider timelines and budgets. You can get an idea of prices by speaking to tradespeople and getting quotes.
- What are the local amenities – is it a long walk to the local shop, does the town have a train station, are there schools nearby?
How to buy and renovate houses for profit
To snap up a bargain, you’ll need to do a bit of research. But that gem is waiting for you.
- Look at areas that are up-and-coming and where homes are increasing in value. These are often great places to focus on.
- If you don’t know the area, what’s the neighbourhood like? Talk to locals and ask them for their opinion.
- Some properties only need cosmetic changes – new carpets or an updated bathroom. It’s a good idea to compare listings, to see how much work each one needs. Remember, it’s only an estimate until you’ve had a survey carried out.
- Once you’ve bought the property, you should carry out that survey, so that there are no structural surprises. This might affect your budget, so it’s best to know sooner rather than later.
- Put together a budget and timeline. This will keep your renovation on track, and give your tradespeople guidance on the project.
- Don’t get emotionally attached. Remember, someone else will be very happy in your newly renovated home!
What should you be mindful of?
- Expect the unexpected. Having a bit of extra money tucked away is a good idea for unplanned work that needs to be carried out.
- Not spending enough. Spending less on tradespeople, or opting for cheaper materials, might save you money in the short term. However, you may encounter expensive problems later on – or the property could be valued at less than you hoped.
- Blowing your budget. Do you really need those expensive tiles or a top-of-the-range kitchen? You won’t be the one enjoying them, remember!
- Too much DIY. Biting off more than you can chew, can land you with a heavy workload. Making sure you have the time and people needed for the work, will ease the pressure on you.
- Ignoring advice. Whether it’s quotes the surveyors are suggesting, or tips from the builders, they’re specialists in their job and know their stuff. It’s important to listen to them, but source more than one opinion – otherwise you could get upsold or pay more than you should.
Other key things to consider
When buying a second house to renovate and sell, there are a few things to think about before getting started:
- There might be a lot of work that needs doing – from tiling to plastering and carpentry. Find a few tradespeople who have positive reviews from customers and ask them to quote for the work.
- Enjoy the process. It can be stressful, but you’ll learn a lot along the way.
- If you’re renovating your own home, you’ll need somewhere to stay while the work is being done. This could be with a relative, or in a holiday home with all the amenities you’ll need.
- Consider how far you are from the site. If you have a long commute, you may not be able to track the progress as often as you’d like.
Renovating a house can be an exciting retirement project – whether it’s your own home, or a house you’re looking to fix up and sell. The renovation process will keep you busy, but the DIY tasks can be very fulfilling. For more tips on budgeting and paying for your renovations, read our article on how to fund your home improvements.