Renovation is primarily concerned with making the existing dwelling into a better one. Conversion turns a property that was not previously used as a dwelling into something habitable. This may also encompass extending the living spaces and using attic or basement developments. Much of the new build processes covered in the rest of the Centre can be applied to renovation, but a big difference is that you will need to assess the true state of the property and plan accordingly. For any project you need to work out the possibilities, calculate the costs and understand the value your work can yield.
As in calculating the potential for a plot of land, you will need to get to know the local area; all the principles that apply to assessing the development value can be applied to renovation. Be wary of overdeveloping or specifying too high a quality home for the typical values in the neighbourhood. The actual assessment of the property and its existing condition is likely to be a specialist task for a building surveyor and a full structural survey is always advisable. However even a surveyor may not be able to foresee all the problems once the strip-out of the property is underway.
Unlike a new build, renovation costs are less precise and budgeting for potential issues is advisable from the start. When assessing the economics it is advisable not to rely on house price inflation. Never build it into your figures other than as a possible up side. It is more often the case that this is eaten into by under-budgeting of contingencies. So in short ensure the development stacks up financially at current prices.
One last thing is to allow for VAT. Unlike new build projects where VAT can be reclaimed against materials, this is not the case for most renovations. However, a change to the VAT rules allows a reduced rate of 5% VAT on materials and labour to be charged by a VAT registered builder if the house to be renovated has been unoccupied for 2 years or more before the work commences.