Buying a run down house to renovate
Discussion
Anyone still doing this?
My Mrs has come up with the idea we could buy a cheap house thats in need of a full refit and spend a few months bringing it back up to standard and then selling it for a profit. Maybe look to complete on something around the end of the autumn and then sell it in the spring of next year.
I know it was pretty common to do but perhaps seems less common these days?
What are peoples thoughts who have / are doing it?
Would probably look to buy a 2 up 2 down at auction or an estate sale. Something thats clearly in need of work and that FTB etal would avoid.
My issues are
SDLT and CGT?
Structural issues
Damp and the like
Getting it cheap enough to make a profit after new kitchen / bathroom / floors
My limited DIY skills - I can do simple things but more advanced is prob beyond me
Anything that big needs official creds, i.e electric / gas will add £££.
Would we need to run via LTD?
Insurance?
Maybe going into a period of lowering prices which might trap us?
On the plus side we have:
Contacts with the trades and access to mates rates for a few things.
Access to trade prices still, not that it means much these days!
A cooling market so more stock,
Time (retired) so we could easily work several days a week on it.
Fairly cheap property in the local area
What is currently a strong ish FTB market.
Looking on RM / LR I think there is currently a gap of about £40k between run down stuff and freshly renovated.
It sounds like a lot but my concern is after all the work and fees etc might not be that much left over?
Any experts care to chime in?
My Mrs has come up with the idea we could buy a cheap house thats in need of a full refit and spend a few months bringing it back up to standard and then selling it for a profit. Maybe look to complete on something around the end of the autumn and then sell it in the spring of next year.
I know it was pretty common to do but perhaps seems less common these days?
What are peoples thoughts who have / are doing it?
Would probably look to buy a 2 up 2 down at auction or an estate sale. Something thats clearly in need of work and that FTB etal would avoid.
My issues are
SDLT and CGT?
Structural issues
Damp and the like
Getting it cheap enough to make a profit after new kitchen / bathroom / floors
My limited DIY skills - I can do simple things but more advanced is prob beyond me
Anything that big needs official creds, i.e electric / gas will add £££.
Would we need to run via LTD?
Insurance?
Maybe going into a period of lowering prices which might trap us?
On the plus side we have:
Contacts with the trades and access to mates rates for a few things.
Access to trade prices still, not that it means much these days!
A cooling market so more stock,
Time (retired) so we could easily work several days a week on it.
Fairly cheap property in the local area
What is currently a strong ish FTB market.
Looking on RM / LR I think there is currently a gap of about £40k between run down stuff and freshly renovated.
It sounds like a lot but my concern is after all the work and fees etc might not be that much left over?
Any experts care to chime in?
Thanks for that its good info.
What was the tax situation?
Do you think there would be money in it when done as a single person enterprise rather than a business?
Did you use trades for all the work or was it 100% out sourced?
For example I would do all the decorating and probably the bathroom myself.
I can do laminate and that sort of stuff.
Kitchen, mmm probably a bit beyond me but I reckon I might be able to do it.
The real issue is stuff like plaster, joinery, CH, electrics thats all not something I can do.
What was the tax situation?
Do you think there would be money in it when done as a single person enterprise rather than a business?
Did you use trades for all the work or was it 100% out sourced?
For example I would do all the decorating and probably the bathroom myself.
I can do laminate and that sort of stuff.
Kitchen, mmm probably a bit beyond me but I reckon I might be able to do it.
The real issue is stuff like plaster, joinery, CH, electrics thats all not something I can do.
Thanks LB. Good to know, I think you are right - will give it some thought.
Just for ref I am retired so time is not an issue and re trades my business was similar to a BM so I have access to trades thats not a problem, just good ones..... mmm. I can also get materials cheap enough. I still have a couple of sources. Cheap enough to make a profit... I think thats where your point is a valid one!
I think the only other thing to mention, I would not be doing this for income so to speak. As it would not be a business there is no need to move onto the next project the second this one finishes, or get this one finished as I have 3 others on the go. So that might work to my advantage? Could also possibly rent out for a couple of years to offset the refurb and help with tax.
I think that might be the way to do it, if we do it as I think it might be hard to get something to turn a profit like you say.
I would also be doing this at the "affordable" end of the scale and probably in the slightly less desirable part of town where I do have a lot of old contacts esp EAs who used to have accounts with us via their property maintenance people.
Just for ref I am retired so time is not an issue and re trades my business was similar to a BM so I have access to trades thats not a problem, just good ones..... mmm. I can also get materials cheap enough. I still have a couple of sources. Cheap enough to make a profit... I think thats where your point is a valid one!
I think the only other thing to mention, I would not be doing this for income so to speak. As it would not be a business there is no need to move onto the next project the second this one finishes, or get this one finished as I have 3 others on the go. So that might work to my advantage? Could also possibly rent out for a couple of years to offset the refurb and help with tax.
I think that might be the way to do it, if we do it as I think it might be hard to get something to turn a profit like you say.
I would also be doing this at the "affordable" end of the scale and probably in the slightly less desirable part of town where I do have a lot of old contacts esp EAs who used to have accounts with us via their property maintenance people.
Thanks all.
Just to close off some things...
Those saying work more / harder in my day job. I am retired, ran my own business for many years so I am no stranger to hard work.
As for the Mrs having "good ideas" and not needing to do the work, yeah I get that. Although she is not shy of hard work I doubt she will be manning the table saw.. painting / admin etc more up her street.
We would be buying cash and not living in it.
Cant read the telegraph article, paywall.
Our budget would be for a 2 up 2 down terrace in the local area.
We are away from next month for a while, so I am going to mull it over. Might put some feelers out just in case something comes up.
Then consider it when we get back depending if we are in nuclear war / financial armageddon etc.
Just to close off some things...
Those saying work more / harder in my day job. I am retired, ran my own business for many years so I am no stranger to hard work.
As for the Mrs having "good ideas" and not needing to do the work, yeah I get that. Although she is not shy of hard work I doubt she will be manning the table saw.. painting / admin etc more up her street.
We would be buying cash and not living in it.
Cant read the telegraph article, paywall.
Our budget would be for a 2 up 2 down terrace in the local area.
We are away from next month for a while, so I am going to mull it over. Might put some feelers out just in case something comes up.
Then consider it when we get back depending if we are in nuclear war / financial armageddon etc.
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