PROPERTY NEWS - In a market where homes to buy are in short supply and prices continue to rise, the appeal of renovating and modernising an 'older' property is strong – especially if it is well-located and comes at a discount price.
"Young families see this as a way of getting much more house for their limited budget, or being able to afford to live in an up-and-coming area, while speculators see an opportunity to make a profit, says Rawson Property Group MD Tony Clarke.
"But as with all financial decisions, there is an element of risk in such plans, and they are only worth considering if buyers are prepared to follow the 'rules' and get the right help."
The buy-to-restore trend is definitely gaining ground now as fast-rising home prices in the most desirable areas and the higher costs of commuting, not to mention rapidly changing lifestyles, prompt prospective buyers to look again at the older, inner suburbs of South African cities.
"Many of these had become very run-down in recent years but are now steadily becoming trendy again, because they are convenient to workplaces and well-supplied with public transport, good schools, shopping centres and other amenities. They are especially attractive to millennial buyers – or those in their 20s and early 30s – who are known for their love of rescuing and repurposing old buildings as well as artefacts."
However, while choosing the right area is vital, it is also important to find the right house to restore," says Clarke. "Not all old properties are worth restoring or improving, and the broad rule here is to look for a house where any alterations that are necessary can be made within the existing exterior walls. Exterior additions are likely to push up the cost unjustifiably."
As an example, a two-bedroom, one-bathroom house will have limited appeal for most family buyers. But if it has a built-on double garage and perhaps staff accommodation, it could probably become a three-bedroom, two-bathroom home with an additional family or TV-room quite easily.
"This would thus be good prospect if the cost of the alterations is not excessive - and if the neighbourhood has a good price spread between two- and three-bedroom homes.
Another good candidate for restoration, he says, would be a home which is quite sound but badly and unfashionably decorated and fitted-out with ill-matched kitchen and bathroom cupboards, old-fashioned light fittings and worn carpets. A cosmetic renovation or some interior alterations to create a more open, modern floor plan could turn such a house around for a relatively modest outlay.
"Similarly, a house on which routine maintenance has been seriously neglected will deter most buyers who wish to move in and set up home. But a home handyman with the time and a reasonable budget for materials can pick up a 'bargain' that can easily become an attractive home again."
And while on that subject, another 'rule', says Clarke, is to set a strict budget for your restoration and stick to it. "If you are not sure how much work will be involved or what the costs will be, you really should get the home professionally inspected and get quotes from a qualified building contractor, before you make an offer to purchase."
You need to make sure, too, that planned changes will comply with municipal building regulations and any heritage restrictions if it is over 60 years old; that any modern improvements will match the style and décor of the original building and that any additions make sense. "You don't want to end up in a five-bedroom house with just one bathroom, for example, or have airy modern living rooms that contrast badly with a cramped, dark kitchen."
Inconvenience and discomfort
In addition, he says, you need to take into account the inconvenience and discomfort of living in a home while restoration is under way, as it is really only worth putting up with this if you plan to keep living in the house long after the work is finished and enjoy all the improvements you've made.
"But above all else, buyers who are considering a restoration project must really get to know the local property market first – and find out just how much margin there would be between the purchase price of their home and a possible sale price, so that they do not run the risk of over-capitalising the property.
"To over-capitalise simply means spending more money on renovations or improvements than could be recouped on the immediate resale of the property, and this is where the advice of an experienced estate agent who knows the area well and can help you decided what is would be 'safe' to spend on your home restoration."
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