Difficult times in the housing market may well mean that bargain properties for renovation are a little easier to find. But how do you decide whether a property has real potential instead if being a millstone around your neck?

Knowledge of renovation is the key. For instance, knowing that cracks in walls that may put other buyers off can be easily fixed may mean you get hold of a favourably priced home.

But it is important to know when it is best to walk away from a house that could waste lots of money. To help you decide whether a property is a good or bad buy, the organisers of The Homebuilding and Renovating Shows (www.homebuildingshow.co.uk) have some useful tips.

Cracks in plaster walls and masonry can look extremely worrying but are frequently only cosmetic. Knowing whether they indicate more serious structural problem can be very useful in making your initial verdict on a renovation project. Isolated cracks, - a crack in a single brick or a stress crack in a plaster wall next to a window or doorway, are unlikely to be structural.

Cracks that are more extensive and follow a pattern are likely to be a more serious.

Look for signs of movement in the building.

Typical causes are subsidence (which may mean underpinning beneath the walls) or the failure of the floor or roof structure. However in a very old building the structure may be perfectly stable despite twists, bows and warps and attempts at repairs may do more harm than good. Old buildings without damp are the exception, so do not be too concerned about signs of damp as they can usually be solved.

First you need to identify the source of the damp. Solving the problem could be inexpensive. In an old brick building, a damp-proof course can be created by injecting silicone into the bricks both inside and outside the building. Do not forget the cost of redecorating, as this usually involves removing the plaster below one metre and then re-plastering. A good plasterer charge around £150 to £200 a day.

Tell tale signs that a house needs rewiring are easy to spot. Look for an old-fashioned fuse box instead of a modern consumer unit round light switches or old wires. Rewiring a typical three-bedroomed terraced house will cost from £2,500 to £3,000, including removing the old wiring, lifting and replacing the floorboards and installing a new consumer unit. The job should take two electricians between five to seven days.

Adding central heating is easily one of the most cost-effective improvements you can make to a house and will always add more to the value of a property than it costs to install.

Adding a gas-fired central heating system to a typical three-bedroomed, terrace house will cost between £2,500 and £5,000 and should take a plumber between eight to ten days. Many old houses were built either without bathroom facilities or have since had them added on the ground floor. Installing a new bathroom at first-floor level is likely to cost between £800 and £1,500.

Creating the stud walling for a new bathroom by taking bedroom space is likely to cost from £1,500 to £2,500, including finishing and tiling, but consider the implications of possibly losing a bedroom to make space for a new bathroom.

Dry rot is a fungus that will destroy timber very quickly. It loves moist, poorly ventilated conditions and is usually found in the roof space or under wooden floorboards. Dry rot is easy to identify - the spore send out fungal strands along the timber and through or along any wall. The first sign of dry root is often its distinctive musty smell when you lift a floorboard or even just the carpet. Getting rid of dry rot will cost around £1,200 for treatment by a specialist firm.