Is "flipping" property a thing of the past?

nubbins

gharrower wrote: »

plus early repayment on mortgage unless you ported it to next property you buy

There are penalty free mortgages about, I have one with nationwide

agrinnall

minx1985 wrote: »

Hence why I would hang onto it for 7-8 months

I did notice you'd said that, but somebody doing this for a living would be looking to turn round in 2-3 months to minimise mortgage costs and get the profit made as quickly as possible.

laidbackgjr

Let's say you are trying to earn an income equivalent to about £30k (pre income tax). Please note these numbers are just approx but give an idea of what's needed.

On a £80k purchase sold in 6 months you would need to earn £15k and repeat again in the year.

To earn £15k after costs, you'd need to sell for £80k + £2k mortgage costs + £2k buying / selling costs + £5k materials / professional workers + £15k profit = £104k - so if you really think that you could sell an £80k house for £104k after doing relatively minimal improvements then it can be done. Personally I don't see that house being worth more than £90k after £5k of materials spent on it.

People who are in property development would tend to be looking for properties at £80k that needed £25k spending on them to then be worth £150k.

Bluebirdman_of_Alcathays

Has Homes Under the Hammer been on repeat again?

minx1985

laidbackgjr wrote: »

Let's say you are trying to earn an income equivalent to about £30k (pre income tax). Please note these numbers are just approx but give an idea of what's needed.

On a £80k purchase sold in 6 months you would need to earn £15k and repeat again in the year.

To earn £15k after costs, you'd need to sell for £80k + £2k mortgage costs + £2k buying / selling costs + £5k materials / professional workers + £15k profit = £104k - so if you really think that you could sell an £80k house for £104k after doing relatively minimal improvements then it can be done. Personally I don't see that house being worth more than £90k after £5k of materials spent on it.

People who are in property development would tend to be looking for properties at £80k that needed £25k spending on them to then be worth £150k.

Thank you for taking the time to reply with the above figures. I had come up with similar costs initially and was looking to keep such a project to a small scale (so I can continue my day job) while I decided whether or not property development would be something I wanted to do long term, so the more modest sale price you quoted in your example is no surprise.

I certainly wouldn't quit a job with reasonable career prospects and decent pay to work on one house, I would need to get some experience under my belt and maybe even learn a few lessons before I decide whether or not to make a living from property development.

On a slightly different note, would you necessarily require a mortgage on a property that was being refurbished to sell on, or are there business loan-type products that would cover such a cost if I set up as a sole trader?

minx1985

Bluebirdman_of_Alcathays wrote: »

Has Homes Under the Hammer been on repeat again?

:T very good!

Foxy-Stoat_3

minx1985 wrote: »

Thanks all for the replies. Back to the [STRIKE]drawing[/STRIKE] dreaming board...

Got that fixed for you!

minx1985

agrinnall wrote: »

I did notice you'd said that, but somebody doing this for a living would be looking to turn round in 2-3 months to minimise mortgage costs and get the profit made as quickly as possible.

Good point. As I would still be doing my day job, I would be working evenings and weekends on the house so the refurb would be quite a long process compared to the timescales professional developers work to.
I certainly wouldn't jump in feet first into property development, I would use a first purchase as a test- do I like the process of buying, refurbishing and selling? Could I cope financially if the house didn't sell quickly? Could I even get a decent return on a refurbished property? All these things would become clearer if I just got on with it, but as I would be investing my (modest) inheritance from my beloved late grandmother and am a homeowner with a considerable mortgage left on my property, I am naturally rather hesitant to blow the money.

audigex

There are better places for you to invest your money. Buy a house that's already done up and rent it out and you'll likely get a better ROI almost immediately.

minx1985

audigex wrote: »

There are better places for you to invest your money. Buy a house that's already done up and rent it out and you'll likely get a better ROI almost immediately.

Not got enough deposit for a BTL mortgage and not sure I'm landlady material tbh...