buying a house to sell to make profit

welshguy_456

Hello all, I just want to see if my idea is feasible. Basically my girlfriend and I live in the same house as her parents, who are now looking to move and downsize.

The house is on the market for 70k and we have 15k available.

Do you think it is possible based on I have been offered in the bank a mortgage anywhere up to 94k, that we used 7k as a 10% deposit and use the other 8k left to do the house up and try to sell it? Is it as simple as that?

Just with a mortgage app which just works out figures I have calculated 63k over 15 years @ 4% is £466 and the same but over 25 years is £332 (the 4% is just an example) now these figures are both comfortable, but if my idea is possible wouldn't people just take out the 25 year figure just to get the lower monthly figure on the mortgage and in doing so have more money per month to spend on the house.

In my mind all I can see is spending 15k (or maybe abit less) and let's say selling the house for 90k with a balance on the mortgage of 60-63k then a net profit of 12-15k?

Thanks for your time
Chris

lovinituk

Will £8k worth of work actually increase the value by an extra £20k? If not then you might just be doing all that extra work to sell it for £78k... or less!

welshguy_456

I see what you and and of course it could happen, but isn't that what people who invest in houses do? They don't spend 20k to make 20k back? Otherwise there would be no point in doing it?

Chris

lovinituk

Depends how much improvement they can make on the property. If its currently a complete mess and can be significantly improved then maybe you can make some money. If it just needs a new kitchen/bathroom and a lick of paint then you're probably not going to improve the value that much, particularly in the current market.

If you watch some of the current property shows, the houses they do up and make any decent money on are usually close to derelict and go through some major changes. The rest of them are in it for the rental market and a longer term investment. You don't even know for sure if the prices that are quoted on these TV shows are even close to the amount they actually sell the properties for.

Can you afford to risk it and then have the property sat on the market for months/years while you wait for your £90k?

ManAtHome

If parents are moving and downsizing, where are you planning to live?

If you like the house, could be worth buying as a home rather than investment?

Yorkie1

You'll need to keep it for 6 months for completing a follow-on sale, unless the buyer doesn't need a mortgage.

ruggedtoast

It's not 2006 bro.

welshguy_456

Thanks for the replies so far. As for the questions

The house is of course not derelict at all but I think serious improvements could be made, ie a new bathroom, kitchen, knocking 2 downstairs small rooms in to 1 large living room, changing a downstairs shower room into a utility room to make more use of the kitchen, re- carpeting and laminate flooring and re-decorating each room eg new wallpaper/paint/scurting boards etc

With regards to the downsizing and where would we live, that is my point, the mortgage payments would actually be lower than renting

But about buying it as an investment to live in, its not in an area where we want to live, nor that it is a particularly nice place which I know will affect its value, but from a point of buying a cheap house that we know and are used to and making money from it that's what I'm trying to find out from the post.

And about keeping it 6 months that will be no problem as the work could be spread out over that period towards 1 year

Please keep any other suggestions coming,
thanks.

Fire_Fox

Have you factored in ALL the costs of buying and selling - estate agent, legal fees, mortgage arrangement, survey?

Soot2006

I'm more intrigued about how you're going to do all those renovations for such a little cost. People see right through decorating and cheap options. As above, that ship has long sailed. If you wouldn't want to live there, why would any one else?

michelle2008

Have you researched house prices in the area? As others have said you might do a lot of work only to discover there is a price ceiling you will never breach.

There a re lots of things I would love to do to my house - but I know they are OTT for the area and as I plan tomove in five years or so I will save then for my forever home whenresaleprice won't matter