How to Buy Unoccupied Property? An Investor Guide

Market Financial Solutions published this 2022 guide for investors interested in empty homes. It points out that England's target of 300,000 new homes a year is not being met and that countryside is shrinking, yet government figures from November 2020 showed more than 268,000 homes in England had stood empty for at least six months.

The guide lists tell-tale signs of an unoccupied house: boarded or broken windows and doors, no curtains, a run-down appearance, accumulated post and junk mail, an overgrown garden and no parked cars. It offers nine ways to track such properties down: driving around, asking local estate agents, speaking to staff at the local post office, using auctions, contacting the council about reported empty homes, looking at building land where a house must be demolished, searching Land Registry records to identify owners, browsing empty-property websites, and approaching owners of derelict historic buildings.

Buying, refurbishing and then reselling or refinancing is presented as a quick route to a return, since properties needing work are often priced lower. Possible projects include remodelling interiors, splitting a house into flats and converting old commercial buildings such as barns and churches. The guide says restored empty homes can lift the yield of a portfolio and often have features that are now scarce, including big gardens, generous layouts, high ceilings and original character.

Three factors are said to drive any such investment. Location matters, including the kind of tenants in the area. Cost means looking beyond the purchase price to building costs, ideally with builders' quotes in hand. Timing means having funds ready, because opportunities disappear quickly, and leaving room for problems. The firm suggests a refurbishment bridging loan, which it says can release funds within days, with resale or refinancing as the exit.

Two funding routes are described. Private bridging finance could let a landlord begin converting a large house into separate dwellings quickly. Government funding for refurbishing unused homes exists but can be slow and complicated, so a refurbishment loan may be a faster option. The guide closes by arguing that reusing empty buildings protects remaining green land, adds homes and helps the economy.

Source: Market Financial Solutions, original article (12 July 2022)