New house project - advice needed

evosy1978

Hello all.

I don’t know if im posting in the right area but here goes.

We are about to buy our first house. We are specifically after a semi-detached house that needs a lot of work doing to it with the intention of making a profit.

Im looking for advice on what to look for in a house or the garden that would potentially boost the price of the house when the work is completed. Im prepared to take on quite a lot of work, but the house must habitable.

Thanks for any advice, .

Robert_Sterling

Look for a run down house in an otherwise well maintained road.

kelloggs36

I have spoken to a solicitor with regards an empty house, and apparently the owners are open to offers before it goes on the market. Trouble is, how do I know how much to offer bearing in mind it is in a real state - needs everything from new wiring, plumbing, heating, windows, plastering, kitchen (original since 1929 and never been updated), bathroom (never had any hot water), front and back doors, garden (80 feet of it) needs cutting back (it is a complete jungle out there).

There aren't any houses similar for sale in the area so I don't know if any offer will be considered. I would like to get in before it goes on the market with a builder who could give an idea of the costs of renovation which would be factored into the equation.

scorpio_princess

The trouble is these days, even run-down houses are going for a lot more than they used to, simply because of the 'sell on for a profit' factor. I looked at a house with my mum yesterday - a good solid house, needs a lot of work (not completely gutting, but there's no kitchen to speak of and really bad bathroom) - 2 brothers inherited it and are asking 185k. We worked out it would need at least 15k, probably 20 spent. Thing is, all the other semis in that area (the ones in good nick) go for around the 200-215k. So really there's not enough between the asking price and the potential selling price to warrant buying it to tart up and sell on - hence it's been on the market for some weeks. My mum loves it, but wants it as a home and is not bothered about the resale value - just thought i'd use it as an example of how homes in a poor state of repair aren't always the bargains they should be.

Even properties at auction are fetching prices not too far off the open market value these days - I think the days of finding a real bargain are well and truly over - everyone knows how well property has done in the last 3 years and wants a piece of the action themselves.

Doozergirl

For a first timer needing to do everything, I'd plan for £30,000 to get everything done on a an old, 3 bed semi. You should be able to pull it in under that but you can't be too careful when you are starting out.

In order to work out what it's worth, you need to work out what it would be worth finished. You do this by checking a website like https://www.nethouseprices.com to see what other properties have sold for. You look in the local papers each week and ask estate agents for details of properties matching the same criteria as the one you are already looking at. You should also go and view lots of other houses as you can compare directly, steal ideas and weigh up the quality of the competition.

Then you take off the amount it will cost to do the work AND the amount of profit you want to make, plus the buying and selling fees associated. What is left is your offer amount.

What is most important for maximum profit is quality of workmanship and every single problem dealt with. If you are having your own survey done, go the whole hog and have a full structural done as it will basically give you a shopping list of what you have to do and what your eventual buyer's surveyor will be looking at.

evosy1978

hy folks, thanks for replies.

Was just wondering what type of things are highlighted by the different surveys. for example the survey that the mortgage lender does, what type of things does that highlight, in comparison wwith the other two.??

thanks,.

albacore1854

evosy1978 wrote:

Hello all.

I don’t know if im posting in the right area but here goes.

We are about to buy our first house. We are specifically after a semi-detached house that needs a lot of work doing to it with the intention of making a profit.

Im looking for advice on what to look for in a house or the garden that would potentially boost the price of the house when the work is completed. Im prepared to take on quite a lot of work, but the house must habitable.

Thanks for any advice, .

You'll need a mortgage offer in principal, and a hefty deposit, or preferably the cash ready.

The world and his wife is after the same.Not saying it can't be done, but the pick of the crop will be snapped up by spec builders who know the agents, and reuse them on the resale. You also need to make quick decisions, its pointless faffing about, you'll lose out.

Essentially you are looking for the worst house in the best road.Or you could look at what others have done, if there are extended places either side then you should be ok to develop.

If it were me I'd go for a detached bungalow on a reasonable plot, and go up into the roof, and either side.

You have reduced labour rates in your favour, so the less profitable houses may come your way.

b21playa

hi mate, just to give you some advice.

earlier this year (April) parents purchased house on a good road that needs fully modernising. was up for £185k and after some haggling got it for £158k (houses start from £200k on the road). the point of this was for parents to put capital down and for me to get it all fixed.

anyway i got it and stripped it bare to its bare shell, with all plaster, ceilings off, remove all wiring, pipes, etc. Now with this kind of work its impossible to live in the house.

as mentioned above every tom !!!!!! and harry after houses needing just minor modernising, but the ones that need further work are the better buy if you can do it yourself and know the right places to buy the stuff.

so far ive spent £5k and thats including new UPVC windows, skips, new wiring, new ceiling boards. a lot of work, but ive saved shed loads, plus ive shoped at all the trade places., and i will do the same for stuff like bathroom and kitchen.

A major point is that certain jobs like wiring needs to be certified, so take this into account.

Being busy now in final year i have put things on hold, but back to it in June to finish it off, and then look around for another project house.

Hope this helps

b21playa

evosy1978 wrote:

hy folks, thanks for replies.

Was just wondering what type of things are highlighted by the different surveys. for example the survey that the mortgage lender does, what type of things does that highlight, in comparison wwith the other two.??

thanks,.

a mortgage lender surveys is usually very basic and look at it from the point of the security of the lenders capital.

An independant surveyor will act on your behalf and point all things out and will be much more detailed, including things like subsidence which can be a big issue.

as mentioned above points out all the things wrong and will need rectifying. remember buyers will have the same report done and any problems can mean loss or profit or a sale

Rachman_2

For my sins, I have just taken on a house owned by one of the family and am having done from top to bottom - it's a two bed terrace and the budget (inc ground floor kitchen extension) is £25K with a £4K contingency.

For that, I intend having done...

replaster
rewire
new central heating
new bathroom
kitchen
new floors (dig out and reconcrete if necessary)
new porch
new windows
new bedroom furniture
new back wall and hard landscaping at the rear
decorating

Pricewise, developers used to work at 20% gross profit margin to allow a contingency and for a profit - that prices your house for you - however I think that's down to under 10% and a lot of the builders I talk to are talking about getting back into just being paid and not taking the risk as other people are prepared to pay so much more than they are for a house that needs work....