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What is a structurally damaged property?
A property with structural damage, will have a compromised structural integrity, like structural faults, poor design or building work. Any property can be affected by structural damage, and especially in older properties, they can be hidden or there may be more than one.
Structural damage that is not resolved makes houses unsafe to inhabit, and could even cause a structural collapse, or need to be demolished.
Most chartered surveyors will conduct a survey during a property transaction, in which they will report any structural defects or suspected structural damage.
How do houses become structurally damaged?
Structural damage can strike a house at any time, whether it be a new build or house built in the 17th century. Structural damage is usually caused by poor workmanship, poor building materials, erosion, excessive moisture or extreme heat.
There are a few tell tale signs of structural damage however, which include:
Standard construction depicts that walls should be vertical, and straight, if they are not then this may be a sign that there is structural damage within the wall or foundations.
Springing or uneven floors, could be a sign within the joists or floorboards, or even a sign of wet or dry rot.
Cracks and crumbling within plaster, brickwork, concrete and stonework could be a sign of damp or subsidence, if there are cracks above a door or window then it could indicate a failed or missing lintel.
A bowed roof could indicate that the roof timbers are moving outwards due to them being too weak to support the tiles.
If your doors or windows are sticking, this could be a sign that the property has moved due to subsidence.
How much work do structurally damaged properties need?
The amount of renovation work needed on structurally damaged properties can vary significantly, depending on the severity and type of structural damage affecting the property.
In most cases, structural damage will be discovered during a RICS surveyors survey of a property – who will also notify you how to amend the damage.
If the property only has settlement (minor subsidence) or asbestos insulation, these can be easily resolved, but if the property has Japanese Knotweed or subsidence, then the property will need a lot of investment to get it to a habitable condition.
In some cases, mortgage providers won’t lend on properties with severe structural damage.
What are the different types of structurally damaged property?
There are quite a few different types of structural damage that can occur in properties, all of which have a varying degree of severity. The most common structural damage types in the UK are subsidence and non-standard construction:
Subsidence in property
Subsidence is where the ground beneath a property subsides, usually caused by ground conditions like clay shrinkage, tree root moisture removal, soil erosion or mining subsidence.
Houses built with non-standard constructions, or anything that isn’t brick or concrete with slate or tiled roofs, can cause issues in the stability of the property.
But there are also a few other different types of structurally damaged properties:
Heave is the opposite of subsidence, and is where the ground beneath the property rises, causing the foundations to become displaced.
Asbestos was used in many buildings during the 1980’s as insulation, but has been linked to the increase of several serious diseases and is considered damage to the integrity of a building.
Depending on the cause of damp, severe damp is a structural problem especially if it’s been caused over a prolonged period of time.
Dry or wet rot
Dry and wet rot are caused by damp conditions that cause fungus to spread rapidly and can affect the integrity of walls, joists and foundations.
Japanese Knotweed is an invasive weed that grows extremely fast and causes damage to the property.
Any wood-boring insect is known as woodworm, and can affect the timber integrity of a property.
Why might a structurally damaged property be a good investment for you?
As with any property investment, a particular aspect of risk is involved, so it is essential to weigh up the advantages and disadvantages of investing in structurally damaged properties.
What are the advantages of investing in structurally damaged property?
Structurally damaged properties are usually sold below market value which allows investors to acquire properties at a favourable price, increasing the potential for higher returns on investment.
Over time, structurally damaged properties can appreciate in value, especially if it is located in an area with strong markets. Buying a structurally damaged property at a lower price and holding onto it could lead to capital appreciation enhancing your investment’s value.
Some investors who specialise in flipping structurally damaged properties, by purchasing properties at a discount, renovating them and then selling them quickly — investors can potentially earn substantial profits.
What are the disadvantages of investing in structurally damaged property?
Structurally damaged houses may have more hidden problems than the initial damage, quite often, properties will have multiple structural defects, which are often connected.
The inventory of structurally damaged properties might be limited and finding the right property for you, in the right location can be difficult. Also, as structurally damaged homes are sold below market value, there can be serious competition from other investors.
As most structurally damaged properties need to be renovated, there is a need for significant renovation budgets to ensure they are safe to live in.
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Is investing in structurally damaged properties profitable?
Buying a structurally damaged property and flipping it to sell, or turning it into a Buy To Let, has the potential to be very profitable.
When selling a structurally damaged property, you are legally obligated to announce the issues, and most properties are sold below market value, which provides a great opportunity for buyers or investors to acquire properties at a lower cost.
Obviously, this completely depends on the severity and type of structural defect, but on a whole, buying low, and injecting a small renovation investment to increase the house price and sell at full market value will create an encouraging profit.
But, the amount of work needed to renovate structurally damaged properties can significantly impact profitability. While some structurally damaged houses might only require minor repairs, others may need extensive repairs that can eat into potential profits.
You will need to consider what your strategy is before you buy the property — are you going to sell the property quickly, rent it out for a steady income or hold onto it for long-term appreciation?
Who are the best tenants for structurally damaged house renovations?
If you are renovating a structurally damaged property, then the best tenants will depend largely on the area surrounding the property.
The demand for affordable rented housing remains at an all time high, and attracts students, young professionals and long-term renters.
Students are always a safe bet, as they have a certain course length, which allows you to have long-term tenants and can plan for when their courses end.
Young professionals can also be an appealing option as they tend to be tamer than students and more financially secure.
How to renovate a structurally damaged property into a profitable Buy-To-Let?
Renovating a structurally damaged property into a profitable buy-to-let investment will involve careful planning, strategic decision-making and effective execution.
Before you buy a structurally damaged property, you will need to get a RICS survey to ensure that you have a clear plan on how to resolve the structural problems. Only when these have been resolved can you think about turning it into
Unsurprisingly, to generate a profit successfully you will need to find the best tenants for your property, which will need to be thought about before you start the renovations.
If you are looking to attract long-term tenants, then you will need to make sure the property is inhabitable and has the facilities for them to expand their family, which could be done with spare bedrooms or ample garden space.
Alternatively, if you are looking to attract students or young professionals, you will need to ensure that the bedrooms are large enough to accommodate private studying areas.
Once you have renovated the home, you will need to develop your strategy and attract potential tenants, which could be done by highlighting the property’s features, locations, benefits and any unique selling points, like access to schools, GP’s, universities, public transport.
To find the best tenants for your property, we would recommend conducting tenant screening to make sure you get the right tenants and remember to check their references and employment or rental history.
Having reliable tenants within your property will be beneficial as you will experience less voids, on time rental payments and hopefully less maintenance costs as the tenants look after the property.
You will also need to ensure that you have a comprehensive rental agreement that outlines the terms and conditions, responsibilities and expectations of all parties involved.
5 Tips For A HMO Property Conversion
When renovating structurally damaged property into a profitable investment, there are 5 things you should consider throughout the building process:
1. Instruct a qualified RICS surveyor
Before you start any renovations, you will need to instruct a qualified RICS surveyor to check the property, and identify the extent of the damage, underlying causes and provide recommendations to resolve them — this should be the foundation of the renovation plan and budget.
2. Budget realistically
You will need to create a detailed budget that accounts for all the renovation costs, including materials, contractors and a contingency fund in case more issues arise. You should plan the renovation step by step, and think about creating a Schedule of Works to ensure that the project stays on track.
3. Choose quality over quantity
When working on a property that has issues with its structural integrity, you will need specialised contractors who have experience in that type of structural damage. There are plenty of firms out there that will have dealt with your issue, we would recommend that you check their google reviews.
4. Prioritise safety
Safety should be your top priority, and ensure that all repairs and renovations adhere to the Chartered surveyors recommendations and any other building regulations, it may also be wise to ensure that the property is future proofed now, as this could save you costs in the long run.
5. Carry out regular inspections
You should stay actively involved in the renovation process and regularly monitor the work being done, which can help you catch any mistakes or deviations from the renovation plan. Any mistakes while resolving structural issues may make the building integrity deteriorate over time.
How easy is it to find a structurally damaged property?
Finding a structural property and renovating into a profitable buy-to-let property, flipping it and selling it forwards, has never been easier!
At The Property Sourcing Company, we pride ourselves on being able to match you with tailored properties straight to your inbox.
All you have to do is join our database, which is entirely free, and we will contact you to discuss your requirements. Then if we have an existing property that matches your described criteria, we will send it straight to you.
If you don’t match immediately, don’t worry! With hundreds of properties being added to our database annually, opportunities are just around the corner!
Our service doesn’t just stop there; once you have matched with the property, we will help you negotiate any deals and help you at every step.
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What alternatives to structurally damaged property are there?
A repossessed property is a property that has been taken back by a mortgage lender or bank after the borrower fails to make the required mortgage payments.
Renovating a structurally damaged property is a complex undertaking that requires expertise, patience, and a commitment to quality workmanship.
Fire can cause structural damage and leave behind smoke residue, while water damage can lead to mould growth and further deterioration. But, when renovated can provide high capital appreciation.
Inherited properties are often in good condition, however they may have been neglected as the deceased owner became older, so renovation will need to be carried out.
Why Invest With Us?
We’ll find you the best deal, with the highest yield possible, tailored to your requirements.
We have years of experience in this industry and are part of a group of companies that regularly purchase properties for below market value, in which we can pass the discount on to yourself. We’ll look at every property we purchase, or even get an enquiry for, to determine if it will offer a high yield. If the answer is yes, we can pass the opportunity on to our investors.
We make it easy, doing all the research for you & finding the perfect property to slot into your portfolio.
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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.
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: