THE COST OF buying property can be a pretty stiff barrier to many of those looking to get into the market.
However, there has always been the promise of bargains for house hunters willing to take on a renovation project.
But has the market reached saturation point? Has a demand for this type of property stopped them being value for money?
Boosting value
For Graham Murray, head of residential with the estate agent Savills, there is still some incentive there for someone looking to take on a renovation.
“If you are a family in the market place looking to buy a family home and looking for a home that requires renovation – there is still value there to be added,” said Murray.
Obviously a couple of years ago – if you bought a home requiring work, the market hadn’t risen as much. You would have gotten better value then. But there is still some there now.
For Murray, the benefit of going this route is particularly strong for people with enough money to forego getting a mortgage.
If you’re a cash buyer who is competing against a finance or a mortgage buyer, you are in a stronger position.
“If you are a mortgage buyer and you are trying to buy a home, you may not have the cash reserve to be able to go in and add value immediately,” he said.
For Murray, a renovated property could potentially bring in “as much as 10 or 15% on the original price once someone has gone in and put effort into renovating the home and making it a kind of walk-in”.
Market saturation
In terms of the availability of good properties to fix up, Diarmaid Geraghty, a valuer and estate manager with O’Dwyer Property Management Ltd, thinks that the market is more difficult than it used to be.
The value has nearly gone out of it at this stage unless you are very lucky to get a bargain along the way – which are few and far between at this stage.
“With the market starting to increase, especially the way it has done in 2014, people now know the true value of the their property, whether it is an apartment or a house. They are not as quick to sell it,” said Geraghty.
Say back in 2011, 2012 and 2013 – if a property got sold sold they would have been happy to get it sold. They would have been willing to take less than what they would get now.
Suitable for everyone?
While Geraghty and Murray have differing views on the value of buying a property to fix-up, they were agreed that a it is a process that does not suit everyone.
“It is a big purchase even to just buy a property and obviously then to do it up. I think people who buy property should have some background in construction or property to understand what is going on. It is most certainly not something that people who have limited time should be getting involved in,” said Geraghty.
While Murray would not discourage anyone from buying a property to fix up, he accepted that there are some people it does not suit, saying:
If you are very time poor and you don’t have the ability or the time or the inclination to do it then I think the best thing to do is to obviously look at a home that is in a walk in condition.
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