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Q. We bought our five-bed house new 13 years ago and plan to downsize next year. The interior is in need of an update, but my husband thinks we should leave it as it is, looking a bit tired, and sell at a lower price. Would there be any financial advantage in revamping it, or should we just freshen it up?

Mrs M Wright, via e-mail

Sarah comments:

I agree with your husband. Assuming that someone can move into the house and it is not shocking or peculiar inside, you would be unlikely to do more than cover the cost of the work. At the moment, though, it is a sellers’ market in most areas, meaning that there are more buyers than properties to buy. Given that you don’t want to move for a year, you should watch the market closely and, if it changes, consider some improvements.

Q. I have been a part-time property developer for a few years, working mainly on small semis in the West Midlands. I want to go full-time, but it seems to be getting much harder to make money – four years ago in Kidderminster, you could make 15%-20% profit by renovation (without taking inflation into account), but now it is more like 5%. I wonder if the only way to make a decent profit is to start going to auctions, but I am unfamiliar with this method of buying. I have about £120,000 in cash and am not keen on mortgages.

I am also hoping to move down to the West Country, but estate agents keep saying it is getting harder to find run-down houses there, so I have even thought about starting to develop in northern France. What do you think of buying at auction, and can you offer any advice?

JB, Kidderminster, Worcs

Sarah comments:

The market is indeed tough. Given the speed at which house prices are rising, it is difficult for first-time buyers to get on the ladder, so they are often forced into buying cheaper unmodernised properties, which cuts down the number available to people trying to make a living from property development.

If you really want to keep on with it, you can, but the margins tend to be small and the risks much greater. Houses sold at auction often have problems that are not always apparent, which may be why the sellers want a quick sale. It is your responsibility to identify these, as you can easily come unstuck. If you are prepared to take on such a project and sort it out, the returns may be greater. Another point to bear in mind with an auction is that the guide prices often bear little relation to what properties actually go for, and you can waste a lot of time and money researching places that quickly become out of reach in the auction room.

I would suggest developing in France only if you live there and understand the market and the nuances of French property law and taxes; its market is not nearly as buoyant as that in the UK right now.

If you really, really want to keep developing, you need to hunt hard, be prepared to take bigger risks, be happy to move and accept that the returns are much closer to 10% than the 20% that they used to be.

Q. We have bought a house in Exmoor national park, which we intend to refurbish to a high standard, possibly building a small kitchen extension, as we would like to run it as a holiday let for larger groups. We read your previous advice to find someone to project-manage the work for us, as we don’t live nearby.

Given that it is a £100,000 project, we have been amazed by how little interest there is. We have approached nearly all the architects, building surveyors and architectural technicians in the area that offer a project-design and management/contract-administration service, and virtually none of them is interested. Preliminary inquiries with building contractors have produced a similar response.

Admittedly, the property is reasonably far from large population centres such as Taunton and Bridgewater, but it is not far from the A39 and other properties in the area are being renovated.

Do you have a source of specialists we can tap into, or can you tell us where we’re going wrong?

KG, via e-mail

Sarah comments:

I hate to be the bearer of bad news, but the probability is that there is no money in it for the firms you have approached, as your budget is too small. Allowing £100,000 for the full refurbishment of a large detached house in the countryside does sound a little tight. If this is the figure that you have estimated you would like to spend on the work involved, rather than one supplied by a reliable builder, perhaps that is the problem.

If, on the other hand, the budget is realistic, and this is the figure contractors have put on the work, then it might be worth searching the Federation of Master Builders for professionals in your area. Even better, pop round to any of the local properties that you have seen being renovated and ask who they are using – they might be able to suggest someone who can help.

Continue reading more advice from Sarah Beeny on The Times Online...