A new roof, a damp course, an arm and a leg

Buy a dilapidated property, do it up and you'll have a dream home that you'd never have been able to afford otherwise, right? Well no, not necessarily. In the third part of our series on bargains, Richard Phillips explains how to make sure that the wreck you've got your eye on doesn't end up costing more than a small mansion

There are many reasons why someone might choose to buy a dilapidated property. It may be a romantic quest to restore a building to something matching its former glory, or it may just reflect a lack of funds to buy something in better condition. Or it may be the attraction of buying an unusual property which has to be converted into residential accommodation, such as the public houses mentioned last week.

Whichever, if you are in bargain mode, it is absolutely vital before committing to a purchase that you have a clear idea of what any renovation may cost. It is pointless buying a wreck that will have cost more after renovation than a similar property in decent condition.

There are three main areas to consider: electricity; plumbing, including any gas supplies; structure and brickwork.

It will be of great benefit to equip yourself with a rough guide of how much tradespeople charge. There is a myth that plumbers, electricians and so on charge well over the odds: in fact each works in a competitive market and, outside London at least, you can expect to pay around pounds 15 an hour. This gives the tradesperson a wage equivalent to around pounds 500 or so a week - hardly excessive.

Be careful when commissioning, however - it is usually unwise to select on price alone. There are plenty of poorly qualified people vying for business who are capable of leaving a trail of ruin in their wake. Bodged work has to be redone, and you pay twice over. The best recommendation is word of mouth but be careful - this should be based on well-done work, not a nice personality. The accompanying article examines the ins and outs of commissioning a builder in more detail.

The next step is to draw up a budget. It is wise to talk to builders, plumbers and electricians about how they charge and on what they base their charges before you even begin to look for a property, and to work out if you can afford it.

The work you choose to do should add value to the property or reduce the costs of running it and not all improvements will automatically do so. Be picky. There is little evidence, for example that double glazing actually reduces heating costs. Unless it is fitted in a large room which has a very small window and is carefully sealed at its entrance door, your bills will almost certainly remain the same. Some people believe that double glazing automatically enhances the resale value of the property but this is not necessarily so either. Some potential buyers will be put off on aesthetic grounds by UPVC frames.

The most important areas to concentrate on are as follows: the roof; guttering and drainage; plumbing. As you have probably already spotted, the common thread linking these is water.

All wood rot stems from leaks. Dry rot originates from leaky pipes. If there are signs of rising damp, it is just as likely to be a case of rising flower beds; as the outside ground level rises, water enters the building. This can be the result of over-keen gardening or of a structural change outside, such as a new patio.

Among the jobs that should be at the bottom of your list are damp proofing and timber treatment. Damp proofing is very rarely necessary if proper measures have been taken to let the house "breathe". Install fan extractors in the bathroom and possibly the kitchen; avoid using gypsum plaster on walls - lime plaster is better and you never see mould growing on it; make sure you have air bricks fitted if there are none at present; make sure chimney flues are properly ventilated.

The same preventative measures should also protect timber and reduce the need for treatments. Timber treatments are, in any case, worth avoiding if possible; they involve highly toxic chemicals.

In terms of the type of properties that hold their value best, structurally sound Victorian houses are probably a better bet than modern properties. Many properties built in the 1950s and 1960s have already begun to look a bit tatty. They can also suffer from a number of structural flaws, one being the use of metal ties to join cavity walls. These galvanised steel pins suffer from corrosion but there is usually no way of knowing whether this has happened without paying for an investigation.

So you have your house, you know what work you want doing, you have the quotes from tradespeople to do it. Remember, what looks like the cheapest option now may not necessarily end up that way - and not only because the work might be shoddy.

David contacted several builders for quotes to restore a late-Victorian three-storey terraced house he had bought. The lowest was for pounds 20,000; the highest pounds 35,000. He chose the lowest and was horrified when the final bill came in: it was almost double what he'd been quoted.

The best way to avoid a surprise of this sort is to take advice from an architect or building engineer on which contractor seems to offer the best value. Also, if you've done your homework properly, you should, as you view properties, start to be able to judge for yourself the real cost of restoration. The estate agent should be able to help as well.

The most important source of information, however, may be contained in the survey. A decent survey will highlight many aspects of the work that will need doing and allow you to forecast accurately how much you are in for.

Finally, probably the easiest way to keep costs down is to do some of the labour yourself. Even if you believe you have no skills at all, you should be able to strip wallpaper, paint, and gut rooms. A few DIY books may be the best investment you make.

RENOVATION TIPS

l Draw up a precise budget of how much you have to spend and set aside 10 per cent as a contingency fund. Even if the work you undertake is well managed, you could easily end up spending more than this. You can employ an architect, building engineer, or chartered surveyor to help you assess these costs, and to help appraise quotes.

l Find out what plumbers, builders, electricians, decorators and carpenters cost and on what they base their charges before you start house hunting.

l Employ a professional to draw up specifications for building work and, if they are extensive, to supervise the work.

l Prioritise the work. The most important areas to concentrate on are:

l the roof

l guttering

l drainage

l plumbing.

The least important requirements are:

l damp proofing

l double glazing.

l Concentrate efforts on improvements that help the house to "breathe". So fit air bricks; ventilate your chimney flues; install an extractor fan in your bathroom; make sure the bathroom does not have leaks; use lime plaster on the walls, which is better at preventing condensation.