Best time to start renovating houses?

kirsty502

Hello,
I was just after some general advice on housing renovations.
My friend and I have been thinking about getting into this for a while now.

I currently have a mortgage with my partner and she rents. We don't have a huge amount to put down as a deposit though, maybe up to £5k if we stretch. Her dad is a builder/kitchen fitter by trade and my brother is a joiner so no doubt we can rope them in to help and they can get things trade price.

Just wanted to know if anyone has done this sort of thing before, we both know it will be hard and have both done a lot of refitting to our own places so know the type of work involved.

Just wondered if anyone knew of any good mortgage deals?

The house we are looking at is up for £49950, we are looking to spend up to $10k renovating and hoping to sell it for anything from £80000+. Done alot of research in that area and the prices seem to be around £100000, but that was in '07 so we know they have gone down quite a bit.

Any help or advice would be great, even if it is just to say stay well clear lol!

Thanks!
Kirsty

Doozergirl

If it was worth £100,000 two years ago and it's up for sale now for less than £50,000 then frankly, it's falling down. Deals with the potential for a good profit after spending a non-existant budget don't exist.

Not only do you need your deposit and the purchase fees (£1000 of anyone's money), you actually need the money to carry out the work! And it's hard work. It's a full time job to turn it around with any degree of urgency. You do not make money by buying a slightly run down place and tarting it up, it doesn't work like that - and that's the only type of place one could raise a mortgage on. You need enough anticipated profit to leave you with a profit when you've vastly underestimated the work that needed doing or the cost of it or you overvalued the house.

You will make mistakes and the best place to make those is a rising market.

Frankly, you can't go into property development with £5000 'at a push'

Colincbayley

Work backwards.

No I don't mean with the renovations.
Find out the 'correct' sales price once works have been completed, take into acccount that price may still fall, then deduct all your costs, including interest payments and a 15-15% bufferzone for the unkown.
Tax off tax and sales costs, then at least 20% for your property margain.
This will give you an approx. figure that you should be paying for the property.
If it is anywhere near your £50K purchase price then the deal may well be worth looking at, however I doubt it in this case.

Do't give up if this one doesn't stack up, keep looking, but you will need a heck of a lot more than £5K behind you!!

Scabs

I renovated a house in 2005 and believe me 10k does not go far.
You need to think about every little detail e.g.skips,tool hire etc etc. I managed to make money in a rising market but in a falling one I dont think I would be so lucky.

Gwhiz

I think right now, as at any time, is a good time to do this AS LONG as you buy at the right price and know your true renovation costs and can add value in doing the work. That principle works in any market.