If you are one of those property investors or developers who really like to be hands on and take control of a project right from start to finish, then the thought of taking on someone else's half baked renovation might not be very appealing, but the truth is there are some solid commercial reasons as to why this can be a good decision.

It tends to be the big, old houses that come up for sale as ?partially renovated'. By their very nature, larger properties take longer to restore, cost more and have more potential for problems to occur.either with planning or the renovation itself. And so the chances of someone deciding to ?throw in the trowel' before the project comes to fruition are increased.

The reasons for someone deciding to sell a property part way through the renovation / rebuild could be:
? The project is costing more than anticipated and capital resources have run out. (Please see Martin's 25 most common renovation mistakes and how to avoid them).
? The project has taken longer than anticipated and the existing owner needs to ?move on'.
? The existing owner has run out of enthusiasm, desire or will to complete the project.
? A change in personal circumstances of the existing owner

The latter point is exactly what had happened to a property in Cornwall that I visited recently.  Here a sizeable manor house / small mansion set within grounds had come into the auction room in a partially renovated state. The previous owner had started this hefty renovation project with the idea of creating a home for his elderly parents, but part way through, sadly one of them had passed away and after that the incentive to continue with the build was lost. Having stood vacant for some years, the owner had eventually decided to sell the estate in a half finished state.

So what's the advantage of buying a property that is partially renovated?

Well if you can come to terms with the fact that you haven't had total control over the project from its inception, there are some big positives to buying a property where some of the work has already been done:

1. Often the really messy and difficult work takes place early on in the project. This is when demolition and clearing work is carried out and major structural changes are done. Often this can be the most challenging and costly part of a project - so if you are taking up the reigns once this phase has been completed, you are in a good position.

2. Any planning and / or building regulations approval will have already been sought and achieved, which for many investor / developers is one of the most frustrating parts of a project. Particularly with older buildings (and / or listed buildings) getting the planning permission to carry out the works can mean plenty of consultation, to-ing and fro-ing with the planning office and making compromises. Seeking planning and building regulations approval can also be quite costly. Once approved and the green light is given, the project can start in earnest but it may have taken months or years to reach this point - all time when working capital is tied up.

3. This point about having working capital tied up is often foremost in the minds of investor developers, many of whom seek to turn around properties as quickly as practicably possible - taking their profit and moving onto the next project in order to maximise their total returns. Clearly, taking on a project which has already been started (and may be quite advanced) means that investors can realise their profit much quicker.

4. Given that it is likely that one of the factors listed above has bought about the sale, chances are it will be a ?distressed sale' and therefore an opportunity for savvy investors. The fact that an existing owner has either run out of time, money or willpower to continue with the restoration may mean that he/she is very motivated to sell and could be quite desparate. This means that a sensible approach and offer from a keen investor could mean that they land themselves quite a bargain.

5. Finally, depending on the amount of progress that has been made with the renovation, building materials may have been bought and are already on site. Whilst this raises security issues, it does mean that someone buying the property in this state can ?hit the ground running' and get work underway again quickly.

Of course there are some negatives to taking on someone else's project, and how big they are will depend on your attitude and approach as an investor.

1. The most obvious downside to picking up someone elses work is that planning, layout and design decisions will have already been made - and they may not be your choice. You will need to decide whether or not to ?make do' and continue with someone else's plans or to rejig the project to your satisfaction. If you do decide to re-work things, then you may have to go back to the drawing board, re-apply for planning permission and undo some of the work that has already been done.

2. The standard of workmanship and build quality may not be as you would wish. Once again, if this is the case, you need to think carefully about whether a compromise on your own standards is commercially best or to re-do some of the work to your satisfaction.

3. If the property is an older, big house, then you need to prepare yourself for the fact that there may still be unexpected problems and surprises. You'll have to have the right mindset and if you are taking on an older, period property or listed building you need to be prepared for the fact that they can be unpredictable. Also, the longer a project goes on, sometimes the harder it is to let go. An enthusiastic restoration can become all consuming on a large scale project and its easier to get sucked in. This is all fine as long as investors don't loose sight of their commercial objectives.

If you want to take on a partially renovated property, the advice is to search for one where the previous owner hasn't cut corners, has used all the correct materials and has been true to the property (particularly if it is an older, period building or a listed property) However, it's fair to say that these sort of opportunities don't rear their heads in the auction room very often, so if such a deal comes along that suits your requirements, then grab it.

Good Practice

If you do find yourself taking on a ?old girl' of a property and restoring an large, old period property or listed building then here are some useful contacts.

? Keep down costs by being hands-on and save money by keeping in mind whether VAT is payable on any work
? Contact The Society for the Protection of Ancient Buildings for skills courses: www.spab.org.uk, 020 7377 1644
? The Listed Property Owners' Club is www.lpoc.co.uk, 01795 844939
? Find your local reclamation yard at www.salvo.co.uk, 01225 422300

Auctions are generally associated with older, individual properties or land developments and people don't think of them as a place to buy a new build property. Any why would they? Historically, developers have been very successful at selling their new developments (very often Off Plan) and didn't need to enter the auction scene looking for prospective buyers or investors. But times are a changing...

During the boom years, new build property could command premiums (not discounts) of 15 - 20% for the fact that these homes are more energy efficient and have modern kitchens and the latest gadgets. Many people like the thought of owning a property that is brand spanking new and so developments were usually sold out before they were finished.

This is clearly no longer the case and you don't have to venture far to come across new build projects that have been stalled due to the credit squeeze. Developers who have enormous amounts of capital tied up in unfinished projects, are strapped for cash and so are now offering huge discounts and incentives to get stock sold and cash flow moving. I've seem discounts of up to 50%+ being offered by developers just to get inventory off their books, but will this continue?

Some developers have resolved an oversupply issue by turning a development into affordable housing for owner-occupiers, with the help of shared ownership or shared-equity schemes.
- Shared ownership allows you to buy between 25 per cent and 75 per cent of a new-build property. You have a mortgage on your share and pay rent on the rest.
- Shared equity arrangements mean you buy 50 per cent to 75 per cent with a mortgage and obtain an interest-free loan from a housing association or developer to cover the remainder.

The number of new homes being started has also declined sharply - with latest figures from NHBC reporting just short of 24,000 new home applications for the past rolling 3 month period. This falls way short of the government target to build 240,000 new homes each year to cope with housing demand.

There's now talk of the construction slowdown being the cause of another house-price spiral with shortages emerging in certain pockets of the country as soon as next year.

So, is this window of opportunity to snap up new build properties at bargain prices, beginning to close?

Back in the auction room, new build property is still available - with property investment clubs and networks also offering ?online auctions' to get unprecedented deals for their members. The bulk purchasing power of such groups of investors can mean that seemingly ridiculously low offers can be put forward for multiple units and developers who need the cash are accepting them.

Read Martin's Top Tips on buying New Build property in the 2009 climate.