Property Investment, is it worth the risk?

edd209_2

Hello, I'm new to the MSE forum and I'm looking for any advice or info on renovating and selling houses as a means of income. I currently own a 2 bed semi (which I bought before house prices rocketed!) and I'm giving serious consideration to selling it, moving in with my partner, paying off my existing mortgage and using the remaining capital to buy a smaller property to renovate and sell for profit and go on from there.
Any advice would be great, particularly from anyone who has done something similar.

Thanks in advance.

googler

Are you willing to take more than 6 months over every renovation you do?

Fang_3

Go to 4OD. Watch Property Ladder. Be at peace.

chucknorris

If you watched property ladder you will have noticed that most of the people that profited on that programme did so because of large property value increases whilst they were refurbishing. Take out those rises and you see a completely different picture. I'm not saying that you can't make money but in a stagant house market, you have to do a lot more than put in a new kitchen and bathroom and redecorate to add enough value to pay the solicitors (buying AND selling), stamp duty, estate agent's fees and all the misc costs (any mortgage related costs etc) to leave a decent profit.

I'd say that you would need to target properties that you really develop (not simply tart up) and add value to, ie extend, convert to flats etc.

david29dpo

It is still possible but the problem is your selling price is fairly unknown. You need to know your selling price, knock off development cost, legal fees, loan payments etc and the profit to make it all worthwhile and bingo you have your buying price.

jonewer

chucknorris wrote: »

If you watched property ladder you will have noticed that most of the people that profited on that programme did so because of large property value increases whilst they were refurbishing.

And in fact, most would have made more profit if they had just left it for 12 months rather than sped £100k on tasteless tat and stupid gimmicks to massage their own egos.

edd209_2

googler wrote: »

Are you willing to take more than 6 months over every renovation you do?

I would ideally be looking to turn over at least two properties per year so 6 months max for each one really.

edd209_2

Fang wrote: »

Go to 4OD. Watch Property Ladder. Be at peace.

Thanks mate, yeah I sky+ Property Ladder every Thursday.

edd209_2

david29dpo wrote: »

It is still possible but the problem is your selling price is fairly unknown. You need to know your selling price, knock off development cost, legal fees, loan payments etc and the profit to make it all worthwhile and bingo you have your buying price.

Thanks, it's not that I'm looking to become a millionaire overnight and I realise the housing Market is very flat at present. I have not had my house valued since '08 so this is really what everything hinges on. I'm expecting at least a 15% drop in value since then but we'll see!

googler

I suggest the OP looks at the original production dates of the Property Ladder programmes (the copyright date on the end-credits). Are there any from the last couple of years?

Also, you'll have great difficulty turning over more than two a year, because with the new money-laundering regs, lenders are VERY reluctant to lend on properties which have been owned for less than 6 mths. Unless you sell to cash buyers, you'll find it VERY difficult to sell a house you've owned for 3 or 4 months......

Jowo_2

googler wrote: »

Also, you'll have great difficulty turning over more than two a year, because with the new money-laundering regs, lenders are VERY reluctant to lend on properties which have been owned for less than 6 mths. Unless you sell to cash buyers, you'll find it VERY difficult to sell a house you've owned for 3 or 4 months......

I understand this applies to personal property sales but would this also apply to property investment that is done via a limited company?

I can't see why a valid property refurbishment business (as opposed to a personal speculator) would be subject to that 6 month holding period or why that business could flourish if they had to put every sale on hold for 6 months.