No To Renovation? Think Again

All property searches we undertake for clients of The Property Finders start with the in-depth discussions to identify the most important criteria on the wish list.  An important follow-up question is “if it turns out a property matching all your criteria needs updating are you prepared to do some or a lot of renovation?” The replies might be a) no way, absolutely not, must be ready to go, b) maybe painting & decorating but nothing structural, c) perhaps kitchen and bathrooms but no more, d) yes, happy to gut it and go the whole way as long as it can all be done within budget.

I totally understand why almost all say no in the case of c) or d) while most are willing to go with b), mainly because anything more than painting and decorating makes them nervous about organising everything from overseas.  However, many clients of The Property Finders have ended up buying a property in need of renovation to make it work for them, although none had set out with the idea of getting stuck into a refurbishment project. In retrospect, not one of those clients has regretted doing it and, in financial terms, their investments have far out-performed their expectations. They had found a property in the right location for them and when they looked at all the issues, it just made sense to go for it to get exactly what they wanted.

So, what are some of the issues I suggest property buyers consider if a property matches all their criteria but internally it’s shabby and tired and needs renovation or it’s just dated and not to their taste. Perhaps the existing layout doesn’t work but with a few walls out of the way it does. Of course, if it’s a country property it is much more likely that significant renovation will be needed; twenty years ago when The Property Finders was established the majority of the inland properties our clients bought weren’t even habitable. That’s not so much the case today but it’s rare find it’s exactly as you want. But for the purposes of this blog. I’m assuming it’s coastal  property under consideration.

In general, the very best locations in prime areas will have been developed years ago and properties, both apartments and houses, could be anything between 20 and 50 years old. And although it’s very likely a property of this age has been updated at some stage it’s also a fact that a 20 year old interior, even though the quality is good, will look very dated by today’s standards. 

Size is also a factor. In the case of detached houses, plot sizes in prime areas have shrunk considerably over the last decade. For me, the dividing line is the 2008 property meltdown. Prior to that it was unusual to see quality properties in prime locations on plots of less than 1,000² but since new-builds started to reappear from about 2015, I see 5/6 bedroom houses advertised on plots as small as 500m² leading, inevitably, to smaller rooms and rooms underground, often without natural light, and little space between neighbours.

It’s the same for apartments. I would expect the size of a 2 bedroom 2 bathroom apartment to be 110m² to 120m² if it were built 20 - 25 years ago and even larger if older that that. It’s very different today. A prime Marbella area beachside development is currently offering 2 bed 2 bath apartments of 82m² and their 3 bed 2 bath apartments have only 105m². That’s really cramped. In a nearby development dating from 2005, better located as it’s beachfront, not just beachside, with very high internal qualities, the 2 bedroom apartments have 120m² and 3 bedroom apartments have about 140m² internal space, that’s 45% and 30% more respectively.  In addition, the listed prices for both 2 and 3 bed apartments in the new development are at least 30% more than you would pay for an older property in the same area. Would the difference pay for renovation costs? Absolutely and with change.

So, what can make the difference and give buyers the confidence to renovate a property in Spain? As I’ve already said, while some buyers have already taken on board that it will be a probability the majority started their search with no intention of getting builders in. A big difference is working with a buying agent.  Right from the outset, we make it clear that we are around for as long as it takes and if it turns out that a renovation is part of the deal, from a few tweaks to a full make-over, then we stay involved, we do not disappear over the horizon never to be seen again after the purchase is completed. 

We will make all the necessary introductions, architects, builders, electricians, plumbers, landscapers, interior designers, whatever is needed. You can be confident our introductions will all be based on past experience of those service providers and we never take introductory commissions. Such payments are very common in Spain and although many estate agents do not expect them many do. If you are working with an estate agent who suggests using any additional service provider always ask if they are being paid for that recommendation. It’s your money and you are entitled to know. If you’re doing a €500,000 renovation and the builders’ quotes cover a 10% introductory commission for the agent, that’s quite a load on your budget. Would certainly pay for several bathrooms!

A big deterrent is that people often assume they will have to commit to making frequent trips to check progress, or lack of it, but I’ve worked for clients who’ve done successful renovation projects while based in Singapore, Bermuda, Cape Town and Kuwait, the U.K. and other European locations without needing more than one or two visits during the entire project. A real advantage is an architect who will include project management in the fee and, without doubt, establishing a relationship with an architect who offers this service  has contributed to the success of The Property Finders’ clients. And of course, Zoom & FaceTime have been game changers. I recall one occasion when I was on site and the swimming pool was ready to be tiled but nobody knew if the grouting should be grey or white. The client was in Bermuda but with a laptop and several buckets of water the client was able to make the decision. 

So, if the location is right but the property needs help my advice would be to go for it, it doesn’t have to be scary. Take references and ask to see examples of previous work. Compare new-build prices with resale + renovation costs. And then there’s the financial aspect. In terms of capital growth the most successful cases I’ve seen over the years have all been when the client has gone for a renovation, in some cases doubling the original investment of buy price plus renovation costs over the medium to long term. However, because of Spain’s high buying costs, amounting to 10% - 15% depending on the region, it’s not so easy to make an immediate profit in the short term but it can be done, providing the purchase was at the right level. The end result will always be, in my view, a larger property, in a better location and exactly what you wanted. You can always upgrade the look of a property but you can never upgrade a location.

Look at our Case Studies for examples of the work undertaken by some of our clients:

Rebuild of an uninhabitable ruin in the country.

Big extension and full renovation of 40 year old house.

From single storey 3 bed bungalow to two storey 5 bed house.

Basement transformation

Made a good house even better