A doer-upper or a turnkey home: Which makes financial sense?

In the current property market, is it better to buy a doer-upper or a home in walk-in condition? We took a pair of modest terraced houses on two Dublin 4 streets – one walk-in ready, the other in need of complete modernisation – and with the help of expert builder Kevin Moran asked which is better value for money. We also get advice from quantity surveyor Patricia Power about the new Nearly Zero Energy Building (NZEB) standard.

DONNYBROOK: WALK-IN CONDITION

34 Home Villas, Dublin 4
Price €650,000
Floor space 61sq m (656sq ft)
BER C3
Cost per square metre €10,655
Agent Lisney

Home Villas comprises two streets of charming redbricks, with Herbert Park providing the backdrop. These houses are small but trade well, and frequently. Number 21, a G BER-rated 61sq m two-bed, recently came to market for €435,000 and has been sale agreed above that, while number 38, a 58sq m two-bed, two-bathroom E2 BER-rated property across the street, is currently seeking €640,000.

Number 34 is in mint condition, having been renovated by a solicitor who has already turned around several cottages. It was purchased last year for €430,000, and since then the layout has been streamlined. The entrance level is floored in a good-quality laminate and, while open-plan, it is arranged into three specific areas: the living area inside the door, the dining area, which includes the original fireplace, and a U-shaped kitchen to the rear. It comes with on-trend black taps with lever pull, a copper sink and copper door handles, and a stone countertop.

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The house has been insulated and fitted with new windows – it now has a C3 BER rating – as well as voguey little touches, such as the industrial-style light switches.

Upstairs are two double bedrooms and a shower room, which was achieved by going into the roof space to the rear and doing a mini loft conversion. This structural work also raised the sloping part of the roof in the back bedroom. The property has a small south-facing yard.

DONNYBROOK: DOER-UPPER

73 Home Villas, Dublin 4
Price €495,000
Floor space 66sq m (710sq ft)
BER F
Cost per square metre €7,500
Agent Lisney

Across the street is number 73, a slightly larger mid-terrace house. It has a smaller, north-facing yard – big enough for bins.

The layout is also slightly different. Its door opens directly into the livingroom, but this is a good size, at more than 25sq m, and with scope to extend the understairs storage along the length of the room. Alcoves on either side of the fire would allow for mood lighting and bookshelves, and there is room to generously arrange furniture around its focal point, the open fire.

This property has a separate kitchen of about 10sq m. Its clerestory windows help bring in western evening light. The property’s only bathroom is adjacent; if you swapped the bath for a shower it would make room for a utility cupboard. Installing new flooring, a new bathroom, kitchen tiling, insulation, new windows and a door would cost upwards of €50,000, estimates Kevin Moran of Moran Builders.

The real hard work here is upstairs, where it would be smart to try to emulate the clever shower-room design at number 34. This will require planning permission. The structural work will cost another €20,000 and a new, well-designed shower room another €6,000, meaning that the house could be renovated from about €76,000, subject to getting a builder to do the work, Moran says.

Estimated refurbishment cost
From €76,000 to completely renovate to new regulation standards and install a valuable second bathroom upstairs.

Total cost after refurbishment
From €571,000, or €8,651 per square metre when renovated.

RINGSEND: WALK-IN CONDITION

40 Aikenhead Terrace, Stella Gardens, Dublin 4
Price €465,000
Floor space 57sq m (613sq ft)
BER C3
Cost per square metre €8,157
Agent Bennetts

Downriver, in Ringsend, is Stella Gardens, a former council estate whose large, south-facing green fronts on to a towpath along the River Dodder. Aikenhead Terrace is the estate’s premier street, where two end-of-terrace houses are currently for sale.

In walk-in condition, having been upgraded by the current owners, number 40 opens into the livingroom. This is a lovely, bright dual-aspect space with an open fire. The stairs up to the two bedrooms is located here. To the rear is a good-sized eat-in kitchen, with the property’s only bathroom – a shower room – to its rear. There is a deck in the north-facing backyard, as well as pedestrian side access, valuable for bringing bins in and out on collection day.

Upstairs are two double bedrooms with ceilings that go up into the roof. You can see the river from here. One has a tongue-and-groove timber-panelled wall. Number 40 has a nice, natural layout but no real scope to add further value, Moran says. “You could possibly extend out at first-floor level, to install a bathroom upstairs, but that’s about it.”

RINGSEND: DOER-UPPER

50 Aikenhead Terrace, Stella Gardens, Dublin 4
Price €450,000
Floor space 57sq m (613sq ft), including 14sq m of uninhabitable rent office 
BER G
Cost per square metre €7,894 including rent office or €10,645 excluding rent office
Agent Bennetts

At the other end of the same terrace is number 50, a property in need of complete modernisation seeking €450,000 – just €15,000 less than number 40. The house is exactly the same size but comes to market with a different layout. It has an uninhabited 14sq m redbrick space to its side, with a separate entrance, that was once the rent office for the estate; it was bought by the owner’s grandfather in the 1950s.

The main property opens into a small hall and then into a long livingroom. To its rear is a small, low-ceilinged galley-style kitchen, and on through again is the property’s only bathroom, a shower room.

Upstairs, accessed via the livingroom, are two bedrooms. The existing house, minus the rent office, is 43sq m in size. There is scope to extend at the back by about 15sq m. This would provide a good-sized kitchen/living/dining area of about 30sq m, but you will need to demolish the existing extension first, Moran says. Finished out, this new space will cost from about €75,000, and you need to factor in another €3,500 to finish the livingroom and bedrooms.

To incorporate the former rent office into the house would add another €15,000 to the cost, says Moran.

To go up a floor and to make the most of the river views (subject to a civil engineer’s specification), add another €40,000, adding a valuable bathroom and a study at first floor. These costs don’t factor in the new Nearly Zero Energy Building regulations (which Patricia Power has advice about at the end of this article). To do that will cost at least another €35,000, Moran says. Total costs then would be an estimated €168,500 for a property that when complete would measure about 87sq m.

A cheaper option would be to incorporate the former rent office and refurbish the existing house to standards similar to those at number 40, so one bathroom remains downstairs. Moran estimates this would cost about €57,000, bringing the total cost of the property, including refurbishment, to €507,000.

Estimated refurbishment cost
€57,000 to make cosmetic improvements, including integrating the rent office into the house, or €168,500 to fully refurbish and extend the house to 87sq m

Total cost after refurbishment
€507,000, or €8,894 per square metre, after cosmetic improvements; or €618,500, or €7,109 per square metre, when refurbished and extended

THE VERDICT

It really varies from house to house and what you choose to do with it, says Kevin Moran of Moran Builders. "In the case of the two Ringsend properties, if the decor is to your liking in number 40, it seems priced fairly well when referenced against the doer-upper, number 50. It is pretty much impossible to get the doer-upper in Stella Gardens to anywhere near the same spec for the difference in their asking prices. Costs spiral when you have to make good on existing renovations, new-build work and/or remodelling. Demolition costs, too, are huge. The turnkey property there is showing better value."

But the tables are turned in Donnybrook, where the doer-upper is better value after refurbishment. Internally, the doer-upper has an extra 6sq m of space, as well as a good layout. But it has little outside space.

The property in walk-in condition has a small south-facing terrace and doesn’t require you to put time and money into it before you move in, he says.

“Time is another factor buyers forget to factor into costs. You have to live somewhere and pay a mortgage or rent on the property where you live while you wait for the building works on the doer-upper to be complete. It’s not a given that you will be quids in on a doer-upper.”

So crunch the numbers before you sign any contracts, says Moran.

PUTTING A PRICE ON POTENTIAL: PATRICIA POWER’S ADVICE

A doer-upper gives you the opportunity to put your own stamp on a place, but, with new Part L 2019 building regulations coming into effect in November, would-be buyers need to take out their calculators and run through the costs carefully before buying.

Refurbishment costs will most likely increase as a result of the new regulations, the quantity surveyor Patricia Power says. "This is because for all existing dwellings where there is major renovation of a building – that is, where external walls are renovated or windows replaced, and more than 25 per cent of the surface of the building envelope undergoes renovation – the entire house must be brought up to Nearly Zero Energy Building standard. This is a very high energy-performance A2 rating on new builds and a B2 rating on existing properties," she warns. It requires a deeper form of retrofit.

Then there is the Brexit factor. “Most builders’ yards don’t hold much stock, ordering in requirements on a per job or on a weekly basis. Many of these materials are currently imported through the UK. With uncertainty around Brexit, material costs will go up.”

She adds that this is already reflected in the tenders she is getting back from builders. “We’d normally include a clause to fix materials and labour for a six- to 12-month period, but, in the current climate, builders, while accepting the clause, are noting that in the event of a no-deal Brexit and material costs increasing, tender prices will have to be revisited.”