While some may enter the housing market with a long list of ‘must-haves’ with the hope of finding a ready-made home, others are more drawn to ‘doer-uppers’ so to speak, and finding a home with potential takes an equally keen eye for detail.
Whether you’re a seasoned investor or a first-time homebuyer, being able to recognise the factors that contribute to a property’s growth prospects is a powerful skill to have.
However, spotting a worthwhile project isn’t as straightforward as it sounds. If you’re thinking of buying a home with potential, here are the key things to look out for:
Choose a nice street
The old adage still holds true when it comes to property value. If you want your home to grow over the years and retain its value, you should always look for a great location first and foremost.
Seek out areas with a strong local economy, good transport links, access to amenities such as schools, hospitals, and shopping centres, and a history of positive price growth.
Furthermore, choosing the ‘worst’ house on the best street might seem like an old cliché, but this opens up the opportunity to improve the quality and value of the home until it matches the standards of others on the street.
Make sure there’s planning permission
Planning permission is an essential feature for a doer-upper, as finding a home with potential for planning gives you the freedom to get creative and really bump up the home’s value.
If you’re lost on which renovations to make, start by comparing your prospective house to the other homes in your location. Could you grow the home to match the sizes of the other houses on the street? Have the neighbours had extensions or loft conversion built? Is there enough surrounding land to extend outwards, or are you better building upwards? This is especially important if you intend to flip the property.
Supply and demand
Understanding the balance between supply and demand is essential. Look for areas where demand for housing exceeds the available supply. Regions experiencing population growth, job opportunities, or attracting new industries often indicate a strong demand for housing. An imbalance in supply and demand can contribute to upward pressure on property prices, offering potential for future value appreciation.
Potential to improve the energy rating
If you spot a low EPC rating, you may be able to dramatically improve the value of the property with a few enhancements.
Whether this means upgrading the heating system, installing a modern boiler, or insulating the loft and cavity walls, changes that increase energy efficiency can bring any home up to modern standards, which in turn will bump up its value and lower the monthly bills.
Tired kitchens and bathrooms
Keep an eye out for homes with dated kitchens and bathrooms, as these are the two most valuable rooms in a property.
A modern kitchen with the most up-to-date mod cons will be an extremely attractive feature for future buyers. The same goes for a brand-new bathroom with modern tiles and shiny hardware. Updating these two rooms is a sure-fire way to increase the value of a home.