Common mistakes made when buying an unoccupied property
Whether you’re buying an unoccupied property to rent, or as a long-term project, buying a vacant property can have its risks. Some important factors to consider when looking to purchase an unoccupied property can include, how long has the property has been vacant for? Is the property weather and watertight? Is the property connected to utilities such as water, gas and sewerage and are there any restrictions on renovating or demolishing the property?
Below are some common mistakes that could be avoided when it comes to buying an unoccupied property:
Lack of preparation
Before you start your property search, make sure you have a clear idea on how you want to use the property, as this could affect your final decision. If you wish to rent out the unoccupied property, then the location, size of the property and what is included within it e.g., parking space or a garden, as well as if it is a commercial or residential building, could affect the overall monthly rental price.
If you plan on turning the property into your permanent residence, then researching the local schools, crime rates within the area, transportation links, and council tax costs could help you determine what your priorities are.
It’s important for buyers to follow their heads, and not their hearts when it comes to buying unoccupied properties.
Before you start your property search, calculate exactly how much you want to/can spend or borrow to purchase the property, while also factoring in legal expenses, moving costs, and any work that may be required on the property. By keeping within your budget, and reserving some money aside for unexpected costs, unoccupied property buyers stand a much better chance of buying a property more suited to their needs while not financially draining themselves.
Ignoring legal and building restrictions
Property buyers should be able to find out from their solicitors or estate agents if there are any restrictions or legal requirements on an unoccupied property. Such restrictions or requirements could include:
- Special permission to be grated for renovations, extensions, or demolition of the unoccupied property. Listed buildings or properties of historical significance can often carry tighter restrictions.
- Major work may not be able to be carried out on the unoccupied property until the land has had an environment survey.
- Before the property can be habitable for residential or commercial tenants, the property must meet the legal requirements for it be rented or leased.
- A restrictive covenant could be in place, which can prevent property owners from doing certain things to the property.
What utilities are available?
With unoccupied properties, there is a much higher chance that the property could be lacking some of its essential utilities, especially if the property has been vacant for a long period of time. Be sure to check what utilities are available and in working order within the property and what may need to be connected in order for the property to be habitable. These could include:
- Water mains
- Internet and telephone lines
- Septic tank
Not investing in the appropriate inspections
Because of the higher risks involved with unoccupied properties, buyers should consider asking for the professional opinion of surveyors and other professionals, depending on what potential issues could be lurking within the property. Solicitors and estate agents should be able to inform potential buyers if the property has experienced environmental issues, such as subsidence, ground heave and invasive pests. However, asking for a professionals opinion could save you money and time in the long run.
Other potential issues within the property that should be inspected thoroughly, can include:
- Roof damage
- Water damage
- Structural integrity
Failure to consider future maintenance costs
If you plan on purchasing an unoccupied property to rent to tenants, then thinking ahead once the purchase stage is complete is crucial. Once any planned work has been completed on your unoccupied property and your tenants can move in, you will still need to maintain the property. Damage, wear and tear and environmental factors can have serious effects on your property. Budgeting for future maintenance can help buyers keep their property in a habitable and safe condition.
If you have purchased an unoccupied property, it may remain vacant for a considerable period of time. Therefore, if you currently have an insurance policy, be sure to check if the cover is designed to provide you with specific cover for an unoccupied property. Some standard home insurance may not cover a second property or a property that has been vacant for longer than 30 or 60 consecutive days. Specialist unoccupied property insurance from Guardcover, can offer flexible cover that gives you flexibility with policy terms of 1, 3, 6, 9 and 12 months available.