Finding diamonds among the distressed

But such properties are not always well-presented – indeed they are often somewhat shabby-looking - and it can take a really keen eye to spot their potential, says Hano Jacobs, CEO of the Realty 1 International Property Group.

“Owners who were having difficulty in making their home loan repayments will obviously not have had much, if anything, to spend on the upkeep of their properties, and it is true that in repossessed properties, grime and clutter can hide a long-term absence of essential maintenance that may cost the buyer a lot to rectify.

“However, distressed properties are different. They are usually sold before the owners have got themselves too far into financial trouble, and most are certainly worth a second look to see if the “bones” of the home are sound.”

What buyers who are interested in distressed properties should especially be looking for, he says, are the following indicators of a “good buy”:

* Good basic structure. Avoid properties with bad cracks, serious roof leaks and rising damp. And if you find a home you like, get it professionally inspected before you make an offer.

* Good infrastructure. Ask your home inspector to also check the electrical system, plumbing and any gas installations and make sure the seller can produce up-to-date safety compliance certificates for these. In some areas, you will also need a borer-beetle certificate.

* Well-proportioned rooms and a good floor plan. Forget any furniture, curtains, carpets and paint colours that are not to your taste and use your tape-measure to get the real dimensions of the rooms.

“If all these three elements are in place and the home is in a good location, the astute buyer will be quick to react, especially if the price is well below current market value for the area, as is the case with many distressed sales,” says Jacobs.

“Indeed, the savings to be made when buying such a property will usually more than compensate for the cleaning, mending and repainting that are probably all that will be needed to turn it back into a real gem.”

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