Property to renovate: Fire & Water Damaged
When looking for property to invest in, one type of property that is often overlooked is water and fire damaged homes. As they are often undervalued, they can provide you with high return on investment, as well as a nifty investment opportunity.
But what exactly do you need to know before buying a fire damaged house or a water-damaged house? What are the warning signs? And how can we help?
- Discounted properties with high yields
- Transparent & honest throughout the process
- We're property experts with years of experience
- Investment opportunities tailored to your requirements
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What is fire damage in building?
Before we look at purchasing a home that has been damaged by fire, we are going to have a look at the type of damage that fires can cause. Fire damage in a building can be divided up into primary and secondary damage. Primary damages include any visible evidence that a fire has taken place. This involves soot and charred materials. Secondary damages extends to damages that can spread through the property undetected, such as water and smoke.
What to know about buying a house with previous fire damage
Buying a house with fire damage is a great way to score yourself a deal, regardless of whether you are a first-time or seasoned investor. However, before you go jumping feet-first into your new investment, there are a few things you will need to know about purchasing a fire-damaged property…
When you buy a home with fire damage you will need to survey the damage caused. The property may not look how you expect it to, there could be smoke and water damage to look at, as well as damage to the structure of the house.
You will also need to be wary of the chemicals that the firefighters may have used to distinguish the fire. Should those chemicals accidentally leak into the air duct, it can result in serious issues with the air quality. Because of this, it is a good idea to have the air ducts professionally cleaned before anyone moves in.
If the current homeowner has already made repairs to the property, it is a good idea to have it professionally inspected to ensure that the repairs performed were up to code.
What are the damages caused by fire?
When it comes to damage caused by house fires, it can be categorised into three types of damage. These are flame damage, smoke damage, and 3rd party damage. Each type of damage brings with them its own issues and challenges, below we take a deeper dive into each of these damages and the problems they can bring:
Whilst there are three main types of fire damage, there are many different types of flame damage. The type of flame damage your property has will depend upon the cause of the fire. If a flame were caused by a naked flame such as a match or a candle it will have a different effect than an electrical fire would.
Because of this, it is important that you choose a restoration company that understand the different type of fire damage and the steps that need to be taken to correct the damage. If you do not have your fire-damaged house restored properly it can result in much larger problems later down the line, such as hidden structural and electrical damage.
Smoke damage is another aspect of fire damage that can remain in the building for weeks or months after the fire has been put out. In the same way that smokes sticks to the clothes of someone who has been to a BBQ or a bonfire, the smell of smoke can stick to the walls, flooring, and ceilings in your home, as well as smoke having the ability to discolour surfaces in your house, and is tough to clean.
Whilst you may be mistaken for thinking that fire damage is as simple as smoke and flames, fire damage actually covers a whole host of other issues, classed as 3rd party damages. An example of this is water damage. As firemen use water to put out the flames, this water can then be absorbed into the walls and flooring, causing water damage, dry rot and plaster falling off. As well as this, any water and chemicals that were used to help distinguish the fire or caused the fire will need to be disposed of.
The heat from the fire can also cause damage to your walls, leaving cracks and holes. These holes are not only a structural issue, but also an access point for bad weather. It is important to get these holes checked properly as if left simply filled in, they can make the property structurally unsound.
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What to look out for when you buy a fire damaged house
Now we understand more about the types of damage that a fire can leave in its wake, it is time to take a look at what you need to be wary of when buying a fire damaged home.
When purchasing a fire damaged property, you will need to keep an eye out for signs of structural damage. It is important to make sure any load bearing walls have been given the all-clear by the structural engineer.
Another aspect that will need seeing to is the copper or PVC piping. The plumbing can often suffer damage during a fire, so it is important to have these checked to avoid problems further down the line.
As we have already mentioned, when buying a fire-damaged home to invest in, smoke damage is a pesky problem you may have to deal with. The stains and smell that smoke bring with it are something you will need to get looked at by a professional.
If the property that you are looking at purchasing for investment was constructed before 1989 then you will need to get an asbestos inspection to make sure there are no risks to health.
Whilst water may not be something that you typically associate with fire damage, however, it can end up doing almost as much damage as the fire itself. Water damage can bring with it mould, water-logged walls, as well as structural damage.
Pros and cons of buying a fire damaged home
As with any house purchasing decision, investing in a home after a fire occurs comes with both pros and cons. Below we break down some of the common pros and cons you should consider when buying a fire damaged-house:
Pros
One of the pros of buying a house renovated after a fire is that they are often cheaper. These types of houses are often undervalued, so as a result you could find yourself with a higher ROI (return on investment) due to their lower price.
If the home is unfurnished, then you may be able to make the repairs for less. If the house fire restoration and repair costs are going to be an extensive operation, then you can use this as an opportunity to redesign the interior of the property.
Cons
As we have already mentioned, there are many things to be wary of when purchasing a house with fire damage. Structural damage, fire damage, smoke damage, plumbing damage, and 3rd party damage are all aspects you will need to be cautious of.
Because of this, it is important to have your home properly inspected. This way you will be well aware of any potential issues that the house may bring.
How to keep fire damage restoration effective?
If you are buying a house with previous fire damage, then it is a wise idea to take steps to protect the entire house as well as the restoration work that has been completed. Whilst it is impossible to make a home 100% fireproof, there are steps that can you take to minimise the risk of it happening again:
- Make sure that you and your tenants know where your utility shut-off points are and how to use them
- Ensure that any electrical machines or items that you apply with the property are properly maintained and serviced
- Make sure your tenants keep high-risk areas clean and clear
- Ensure that your fire suppression systems have the desired reach and are functioning correctly
- Create and maintain a fire escape plan so that your tenants may exit quickly and safely
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Water Damage
As we have already mentioned, water damage is an aspect of buying a fire damaged home that is rarely talked about. It is important to know the signs and symptoms of water damage, as if you are purchasing a fire damaged property it is an outcome you may have to deal with.
What are the signs of water damage?
If your potential investment property is suffering from water damage, you should seek professional treatment for the property to avoid more damage to the property. Below we are taking a look at some of the signs that you have a property that is suffering from water damage:
Damp smell
Whilst the majority of the signs of water damage are visual, this is not always the case. One of the biggest warning signs that you may have a damp or water problem is a smell of mildew or damp. If you can smell mildew in your property, you should get a professional out to investigate further.
Swelling in the walls
If you can see swelling in the walls, then you may have some bother. This is often a very tell-tale sign that you have serious damage from water. If you can see swelling or buckling in your walls, this will mean that the drywall or wood has absorbed a lot of water.
Water stains
Last but not least is the presence of water stains in the property. If you find a water spot, you should trace the source back and determine how severe the issue is.
What are the investment options?
Residential Buy To Lets
These tend to be normal residential houses, 2 to 3 bedrooms terrace, semi-detached, detached or flats. They are houses that are suitable for the average renter and are sometimes known as vanilla buy to let properties.
A House of Multiple Occupancy (HMO) is a rented property occupied by at least three people who are not from one household or five or more people, forming two or more households.
This type of Buy To Let is a freehold block which offers multiple, separate or independent residential units. This can be a variety of different types of property such as blocks of flats or houses converted into flats.
This is very similar to HMO’s and even are often referred to as non-licensable HMO’s. They have many characteristics of a typical HMO but don’t require the licence, but they may still require planning permission from your local authority.
as the name describes, this is a commercial premises and it is when you let the property out to one or more businesses. It’s often referred to as Commercial Landlord Mortgage, Business Buy To Let Mortage or Commercial Investment Mortage.
What does more damage water or fire?
Whilst a fire has more of an obvious effect on a property in terms of damage, water can bring with it its own challenges that often end up rivalling the effects of the original fire.
Whilst fire damage brings with it smoke, structural damage, hazardous air quality, and more. Water damage on the other hand can also destroy structural integrity and can eat away at floors and walls, leaving you with a hefty repair bill.
A fire is worse, however, water damage is still incredibly destructive and can be an expensive fix.
Whilst many investors may turn their nose up at the idea of purchasing a property that has suffered from water and fire damage, these properties can prove to be a smart investment when in the right hands. If you are looking to get started in investing or are looking to expand your property portfolio further, we may have the solution for you!
Investing made simple
Whether you are a seasoned investor or a first-time investor looking to dip your toes into the wonderful world of property, we are here to help!
Here at The Property Sourcing Company, we are spearheaded by a roster of industry experts, with over 50 years of combined experience in BMV property deals.
We go the extra mile to tailor our service to you and we pride ourselves on our ability to source you a variety of investment opportunities. When you purchase your next investment opportunity through us, we take care of everything. From solicitors to surveys, we take the stress out of property investments. It’s just one of the many ways that we make investment work for you.
So, what are you waiting for? Kick start your investment journey today by filling in one of our free online forms, or give us ring!
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Our Locations
You might be wondering where we are able to offer these fantastic Buy To Let opportunities with great yields, and the answer is pretty much anywhere in England and Wales. We’ve detailed below some of the main areas that we regularly buy properties in, just to give you an idea.
- Bath
- Birmingham
- Bradford
- Brighton
- Bristol
- Cambridge
- Canterbury
- Carlisle
- Cardiff
- Chelmsford
- Chester
- Chichester
- Coventry
- Derby
- Durham
- Ely
- Exeter
- Gloucester
- Hereford
- Kingston upon Hull
- Lancaster
- Leeds
- Leicester
- Lichfield
- Lincoln
- Liverpool
- London
- Manchester
- Newcastle
- Norwich
- Nottingham
- Oxford
- Peterborough
- Plymouth
- Portsmouth
- Preston
- Ripon
- Salford
- Salisbury
- Sheffield
- Southampton
- St Albans
- Stoke
- Sunderland
- Swansea
- Truro
- Wakefield
- Wells
- Westminster
- Winchester
- Wolverhampton
- Worcester
- York
Buy To Let Investment Examples
When we say that we can source properties that offer a high yield, you don’t just have to take our word for it. Below you will find some of the properties we’ve recently sold to our investor database and their example yields:
- Area: Gwent
- Market Value: £70,000
- Discount (%): 12.5%
- Net Purchase Price: £61,250
- Potential Rental: £500 p/m
- Potential Yield: 10%
- Area: Leeds
- Market Value: £80,000
- Discount (%): 12.5%
- Net Purchase Price: £70,000
- Potential Rental: £550 p/m
- Potential Yield: 9.5%
- Area: Crewe
- Market Value: £100,000
- Discount (%): 15%
- Net Purchase Price: £85,000
- Tenanted At: £575 p/m
- Yield: 8.1%
- Area: North London
- Market Value: £290,000
- Discount (%): 15%
- Net Purchase Price: £246,500
- Potential Rental: £1400 p/m
- Potential Yield: 6.8%