Few endeavours give more satisfaction that taking a run-down property and transforming it into a home, but don’t just rely on instinct when buying a fixer upper…
Ripe for refurbishment”. “In need of a sympathetic upgrade”. “With potential to extend”. “Would benefit from some modernisation”. “Will make a wonderful home”. “Offers wonderful potential”. “Is essentially in good condition, but…”
These are just some of the ways estate agents describe what is sometimes known as a “fixer-upper” – a house for sale that will need work to be made liveable. Houses like these probably attract three types of buyer, with three distinct mind sets.
First is the quasi-investor – as seen on TV property shows – looking to scrub a place up and ‘flip it’ for a quick and easy profit (or so they hope).
Second is the pragmatic or reluctant refurbisher, someone who might not particularly want to take on a project but who has an eye for a bargain, or sees that the walk-in option in their price range or preferred location is not going to materialise.
Third is the dreamer who positively wants to get his/her hands on a wreck and transform it. A positive, optimistic soul more focused on the potential that a house has than on its obvious drawbacks.
In reality, the purchaser of a house-in-need-of-refurbishment-or-extension probably needs a mix of all three; you mightn’t be refurbishing with a view to profit but you don’t want to devalue the property or invest in an element that doesn’t provide enough value, either ‘in use’ or in some future sale.
At the other end, most of us display the ability to imagine our dream house, and to enjoy the daydream. And we all have a streak of that middle mind set of thrift and pragmatism – sometimes more than is good for us.
If you are reading this because you have bought or are thinking of buying a fixer-upper, the first step is to recognise where the balance lies in your own mind between these three approaches.
What to think about, in a nutshell
When you start assessing the house, hopefully before but also after the purchase, a few universally important considerations need to be taken into account.
One is your time frame: how long do you anticipate living in the house for, and what is it in your circumstances that would make you move?
Two is your money, both for the purchase and the subsequent work: how much is available, where does it come from, what conditions are on it, and what will it buy? These two are related; you won’t want to pour big money into a five-year house.
Next is how you want to live: how much space do you need and how would you like to use it, including some predictions on your future needs.
Then there is the potential of the house itself, what are its good points and opportunities? And last but by no means least there are the potential pitfalls – obvious and hidden disadvantages and things that need to be fixed.
When you sit and think for a minute about how much there is to consider in that last paragraph, it’s amazing that the decision to make an offer on a house can be made on the basis of one or two short viewings, almost entirely on instinct, especially as regards two key aspects: the cost of doing it up and the potential it has to work in some new or extended configuration.
The points below might serve as a bit of a checklist wakeup call before you let your subconscious make any quick decisions…
“In need of some modernisation”…the structural survey
The list of things to be fixed should be dealt with by the condition survey, commonly but incorrectly referred to as the structural survey.
The best of these will be very thorough. They will itemise what needs to be done, give reasons why, prioritise, and put ballpark costs against them – or at least be detailed enough that a builder could do so.
Remember, you don’t have to renovate the entire house in one go. So if you’re on a budget it’s a good idea to ask the surveyor to break down the work into three stages: what has to be done immediately, within the next five years and what is likely to be required over the next 10 years plus.
The more cursory surveys limit themselves to answering the question “is it going to fall down?” and sometimes they do a poor job of being clear even about that!
A good condition survey is essential, but even a thorough one is restricted to assessing what’s there – it doesn’t pick up on the possible issues that might come up for a house that is being purchased with the aim of having significant work done on it.
An example might be a crack that is seen and assessed as being stable but that might not be accurate if that area is one where a new opening is needed and thus have an undermining effect.
Another example would be where a previous extension might have been decently built, but badly planned – condition surveys don’t comment on that kind of disadvantage and it’s amazing how a badly planned addition can tie your hands, unless the budget is there to get rid of it. In that sense it’s almost better if it’s badly built as well – then you won’t feel too bad about knocking it down!
Condition surveys also don’t generally indicate which internal walls are loadbearing and the old staple of knocking on walls basically tells you nothing – you often get structural walls that sound hollow because of how they were plastered for example.
And while the survey might comment on how sound the roof structure is, they often don’t comment on how easy or difficult it might be to convert that attic space (there exist both technical and regulatory issues to consider).
One last thing to be aware of in relation to the condition survey is that where the house is old, and of traditional construction, then the survey should acknowledge this, and not be just a list of how many ways the old construction doesn’t meet current building regulations.
Not everything about an old house can or should be brought up to current standards – some forms of traditional and modern construction are simply incompatible, and mixing them can do unanticipated damage. So if the house is old then advice from someone with traditional building experience is essential.
“Will make a lovely home”… one size doesn’t fit all
The spin of estate agent description knows few bounds (buyer beware!). Better to park it and evaluate the house in real terms instead of as advertised.
The two aspects that I often find misleading are ensuites that are a feature on paper, but of no use in real life, and box bedrooms – often too small to use as such*.
There is a campaign in the UK to have houses advertised by area rather than number of bedrooms, and that is something that would be very useful, not least because once people have bought, say, a 3-bed, even when the third bedroom is useless, they are reluctant to get rid of it because of the effect on resale value.
I’ve noticed that people in similar circumstances can live happily in very different amounts of space, but it does make sense to get your head around how much you think you need – based on where you live now, on houses you’ve lived in in the past, family, friends and relatives’ houses etc. While trying not to become a square footage bore in the process of course!
While smaller houses have less fabric to maintain and can be cheaper to heat, you must also consider the layout and exposure. For instance a two storey mid terrace benefits from party walls and even though it has the same square footage as a bungalow, the bungalow has a bigger footprint and all walls exposed to the elements.
Moving beyond size to layout, one big thing to think about (and one that many old and even recent houses don’t cater for) is the type of space you want to live in. How open-plan would you like the house to be and do you see yourself using a kitchen that’s functional and self-contained, big and central, seamlessly integrated into a bigger living area? These are all important aspects to be factored in.
Do you want a separate space to escape from a more bustling living area, and if so does it need to be big or can it be cosy? Do all bedrooms need to be on the same level? Do you need a bedroom at ground level – for yourself or family visitors? Do you need to add practical spaces to the house – another bedroom, a playroom, a utility space, a downstairs bathroom, a home office area?
And don’t neglect the need for storage – which becomes more important the smaller the house is. It can be easy to be won over by a house having attractive spaces (or spaces you can imagine being made attractive).
It can sometimes take a conscious effort to go back to the checklist of what you need, especially on the mundane side, and truthfully assess what the new house provides so you know what else you’ll have to create.
“A unique opportunity to invest”… budget considerations
The question of the budget is complicated on projects like this because of the balance between the purchase part and the refurbishment that comes afterwards. The two interact and probably the mix is quite fluid during the house-hunting phase, as properties that need more or less work are compared with each other and assessed against the mortgage offer and any other funds.
Build costs are really something that only a professional can make an off the paper estimate of, lay people’s projections are invariably over-optimistic with an unrealistic view of what can be done within their budget. Also, too much tends to be left unmeasured when the offer is made.
Clearly everyone’s circumstances are different, but usually this type of comprehensive refurbishment project is one where bank money is going to fund the additional work, and that money is going to come with various conditions, one of which is going to be establishing how much your plans are going to cost and having that stated clearly. It also may involve the bank limiting the loan to a figure that’s less than the purchaser was hoping for.
The reality of all of this in my experience is that the purchaser tends to make a very rough judgement call on the house, based largely on instinct. That judgement is often then tested by a bidding war for the house, where the purchase price creeps up to take more of the total fund, leaving a smaller pot of money for the refurbishment.
If you are the intending purchaser of a house that might or might not go your way you may well be reluctant to spend the time and effort on getting a rough design, rough scope of work, and rough budget worked up – all of which will cost money.
The total cost mightn’t be huge, but it is hard to part with money for something that is still speculative. A quantity surveyor, builder, or architect might be approached to advise briefly on the basis of costs per square metre for both refurbishment and for extension, and although those rates are extremely blunt, they might allow some rough comfort to be had.
At the house-hunting phase it probably only takes one such study for one house to give you a sense of costs, and you can extrapolate for others. For peace of mind, add a 10 to 15 per cent contingency to the costs you were given.
“Offers wonderful potential”… getting creative, plans in hand
To finish, there is the aspect of the house that makes you forget for a while about the budget, the list of repairs, the hassles, the practical requirements. When you look at a house that needs work, a lot of what you are looking for is potential.
This is a creative impulse, even if you don’t usually consider yourself the creative type, as it is all about imagining something. Assessing the potential of a house does involve a great deal of instinct (again), but there are a few pointers that might help.
The first one is the most basic – get the plan down on paper. Make sure you have a decent, drawn-to-scale set of plans of the house (and the site around it), ideally with the loadbearing and non-loadbearing walls indicated on them.
The difference between an estate agent’s blueprints and the accurate measurements can be quite significant. The ‘real deal’ will be hugely useful to look at and play around with.
Some of your preferences might be easily covered, but where they’re not you need to see if it makes more sense for you to rethink how you might do things based on what the house will lend itself to, rather than just ploughing through the place like a bulldozer. Give yourself some time to work this out.
If you need to add space, be aware of any restrictions that might come into effect – limits on what you might get planning for, good parts of the layout that you don’t want to interfere with, etc.
When you are in the house, identify what you feel are its sell out features. Where is the best daylight and what spaces benefit from it? How does it connect to the outdoors – do you need to open it up to make better connections or take account of views (sometimes even quite mundane views can be lovely if they are captured from the right places inside).
Are there spaces that you wouldn’t want to change? Does it have original features or well worked aspects – they don’t have to be grand or old to have value, they just need to ‘work’.
Most people have the ability to sense potential in general but not everyone can think spatially. Oftentimes if the solution isn’t obvious, we tend to be cautious. The first source of assistance to turn to is probably someone you know who is better at it than you are – a friend or a family member that you can bring to the house with you.
For houses where it’s not likely that you’ll have to reinvent things too much then that’s probably enough at this early stage. But it can make sense to turn to the experts, especially if there is a big gap between what’s there now and what is needed to realise a house’s potential and make it work for you.
The bottom line is, if you’re looking at a house for sale and you can’t quite visualise how to make it work, but you can’t let it go either, then that’s probably the point where it might be worth seeking some help.
Stephen Musiol MRIAI
Small Spaces, 114 Parnell Road, Dublin 12,
tel. 01 4547287, www.smallspaces.ie