I thought I would add to this, as I am 18 months into a house renovation.
To give some perspective, my house has had in the last 18 months:
* new roof (some slates re-used, but all the wood and felt etc replaced)
* all render removed, and re-rendered
* all internal plaster removed and replastered.
* all the ceilings replaced
* all wallplates replaced
* any wood that touches any outside wall replaced
* couple of hundred lintels installed (all external windows, and most of the internal ones)
* all bar 3 windows replaced
* drains replaced
* new boiler
So just carpets and curtains left ......
Pro's: are you can buy somewhere you could never afford, and you know all the good and bad bits.
Con's: and there are a lot
1. Kiss goodbye to your bike, and your free time. Renovating a house takes a lot of time, and any free time you have you will use buying and sourcing materials.
2. Buy decent protective gear, as coughing up shit from dust/fumes isn't nice.
3. Allow at least 10% more than you think for budget if you know what you are looking at, if you don't double your budget and add a bit.
4. Get a decent survey, and if possible go around the house with them. As you need to check they actually get into the roof to look around.
5. A lot of builders are crooks, so you need to learn to spot the dodgy ones (I've sacked 4 people so far, as lots talk a good game but can't actually do the job) .
6. Day rate is bad, if you can't be around when builders are working.
7. Dust, whilst you can live in a building site, it will destroy all your stuff (I ended up living in a tent last summer, because it was so bad)
8. Rubble, you will be amazed how much rubble you will generate and it's expensive to get rid of.
9. Sand and Cement ...... if its an old house (1930's or older) and its got sand and cement on the outside walk away. Most builders say its fine, however I know from experience (last two houses had the same problem) that while builders think its fine, that's because they are used to sand and cement, and its cheap and easy to work with (its rock hard 24 hours later, not like lime) and they don't care what happens in 20 years time. However it you have an old house, it its been sand and cement rendered you are going to have a lot of rotten wood and damp inside the house; which is *very* expensive to fix.
Before you start this, do you know any builders? As if you are buying a derelict house you will need to know some good ones. As whilst people can say you can DIY it; having your house collapse on you because you don't know what you are doing would be bad!
Also you need to bear in mind, that if anyone breaks into your house whilst its being worked on and hurts themselves you can be sued, so I had to screw shut doors every evening and install security cameras.
So if you aren't happy with the cons look for something that is tired, rather than derelict.