Property Advice: Renovation Projects
How to in a Nutshell
It is no secret that buying a rundown property and renovating it can be a profitable and enjoyable way to buy property. As with all acquisitions there are certain precautions that MUST be considered when going down this route in Portugal.
As a company specialising in taking its clients all the way through and beyond the point of sale we are well versed in sourcing, securing and managing renovation projects.
Of course there are a number of core elements to consider before even considering this type of project, namely:
A total budget must be considered as there are a few differences with this type of purchase opposed to buying a typical resale property.
- Land Cost: Typically any land acquisition will be paid for in cash, as the banks will, in most cases not allow any mortgage for this type of purchase
- Build Cost / Labour: Whether undertaking the work partly or wholly yourself, you will undoubtedly require a local contact, whether architect, builder, lawyer, project manager, to prepare all the required legalities for you. Remember, the building codes in Portugal are extremely strict, any violation of these may mean costly fines, and unnecessary time delays.
Of course, the cost of buying and subsequently renovation a property means that your money can stretch quite a bit further. That being said, the chances of buying something that "doesn't need much work" for next to nothing, are exactly that next to nothing. Portugal is a well developed tourist area, with a high demand for its precious plots of land, in fact in many area's there is no possibility to buy nor build any new villa's, and the only option is to buy a pre existing one and rebuild it.
Some key things to look for with this type of purchase:
This is the most important factor to consider whilst looking for a project. If the property is in fact a "Ruin" then the chances of it having a building permit are quite slim. Also, if you are granted permission to rebuild the norm is the "ruin" can be rebuilt to the same floor size. This of course limits the scope of your build, as typically there will be a large plot and a small build area. Of course, in some cases, dependant on the area you may not even be granted building permission and be left with a plot of, worthless, land.
A thorough title search is a requirement with this type of purchase; many of the more inland sales of land derive from family passing on land from generation to generation. This in itself is not a huge problem. However there may have been changes in zoning, building or even ownership that have been overlooked or not realised through the years.
With many plots there are no connected utilities, i.e. water electric and gas. Without these there will be of course a requirement to have the relevant authorities determine how a supply can be obtained, whether via extending cables, installing a bore hole, or generator. This is quite an important factor to take into account if you are looking in a more isolated location for your home.
The satisfaction of carrying out a project such as above is huge. And the results are you can get a much larger or exclusive property than your money would allow had you decided on a resale property. But bear in mind there are of course the stress and hassles' that come with any project in a foreign country. With this in mind, we offer a tailored service whereby we insist on pre approved building plots, with all the required utility information and costs before making any commitment to purchase. Also, we chose select builders to give you ideas on construction costs, designs and time frames, leaving you with the only worry of whether to have a round or square pool!
Find Out More?
To find out more about how we can help with this type of purchase please fill in the contact form and we will be in touch shortly.