Cosmetic buy to sell

catoutthebag

marksoton wrote: »

In which case you shouldn't be doing it.

You shouldn't do something that has the potential to make money short-term if it doesn't constitute a long term textbook definition of business ?

I think that's the most bizarre thing I've read on the forum

But thanks for your input in what another person 'should' or 'should not' be doing . I'll make that choice and I'll let you decide what you should or should not do.

student100

Essentially you have the idea of starting a business (buy something, add value to it, sell it, profit! is the basic business model of many thousands of companies and traders). Whether you intend to do this once or a hundred times it's still a business.

So read up on starting your own business and think about common points:

- this is not a "novel" business plan, so chances are, if making money was ridiculously easy, someone else would already be doing it
- it's perfectly possible to build a good business doing something that's not "novel", but it is hard work, and there is a significant chance of failure. You can reduce the chances of failure if you are particularly skilled in the area of business, you do lots of research, you put in a lot of effort, you are prepared to make mistakes and learn from them etc
- starting any business requires capital, and there is a risk that you will lose any capital you invest
- you'll have to learn about relevant legislation, including tax and employment legislation, and make sure you comply with it (and/or pay professional advisers to help advise you about this, e.g. lawyers and accountants).

marksoton

catoutthebag wrote: »

You shouldn't do something that has the potential to make money short-term if it doesn't constitute a long term textbook definition of business ?

I think that's the most bizarre thing I've read on the forum

But thanks for your input in what another person 'should' or 'should not' be doing . I'll make that choice and I'll let you decide what you should or should not do.

Dear me.........

hazyjo

Don't forget solicitor's costs, EAs costs, van/skip hire, tradespeople, mortgage repayments/interest, mortgage deal costs, the fact you may have to keep it 6-12 months before selling on as someone may not be able to get a mortgage on it otherwise, utilities/council tax, stamp duty.


Margins are way too tight. As above, if the market dips, you'll be back to square one (or out of pocket). I once bought for £227k-ish. Did loads. New roof, kitchen, d!cor, shower, etc - sold for a grand more than I paid due to recession. Same house is now worth around £450k 5 years on.


Sometimes the house value will go up whether you decorate it or not. It's often the market that's added value, not what you've done. I prefer to start again rather than have someone paint it all magnolia and put in cheap beige carpets. I've ripped out two cheap kitchens which 'developers' have put in to replace with my own choice.


Jx

antrobus

catoutthebag wrote: »

....- with fees added in, is a projected profit of maybe 6-8k worth it as a first project!...

No idea. Depends on what size of investment you are talking about.

catoutthebag wrote: »

...- what mortgage would I need?...

A commercial loan of some kind. There are plenty of small banks around who are prepared to do this sort of thing.

http://www.money.co.uk/bridging-loans/bridging-loans-for-property-development.htm

catoutthebag wrote: »

...- would I pay tax on the sale?

Yes, if you make a profit.

Jhoney_2

Post 3 was really uncalled for, your reply in post 7 was even more combative to read.

You have posted a question but are not the only one who will read it, so you should expect the fullness of a reply to be broader than you specifically at times.

No need to be so personal if you don't like what you read.

spadoosh

Things to consider

Flats are a restrictive market.
Normally issues with leasehold
Cosmetic improvements are unlikely to increase the value of a property too much, structural adds value cosmetic makes things easier to sell although new kitchen and bathroom can add some value.

Im not sure if your planning on selling your current property and doing it that way or keeping it. keeping it will be more expensive and definitely the business route. If its something to do up as you live in it then for the most part you'd be able to sidestep most of the rules, naturally gains will need to be declared.

Any mistake could be very expensive.

Not hoping to put you off but you need to be realistic. With all due respect your asking fairly basic questions on development one which if you are serious you should be researching and not hoping for the most suitable answer on a public forum.

Theres plenty of information about on property investment and renovation (the work side of things is the easy bit, its the money and finance side of things you should look at) Check out the HMRC website and they will tell you more or less everything you need to know in terms of declarations and regulations. Pop in to a few banks and ask the basics to see how they react with you and get their input as it will be one of them giving you the money.

Good luck.

Pixie5740

catoutthebag wrote: »

A) I've said excluding fees and given projected profit
B( I've never argued it wasn't development? So what's your argument?

Who rattled your cage? I wasn't having an argument I was just confirming that booksurr was correct about the mortgage and tax.

Booksurr asked, "so you wish to be a property developer," to which you replied..

catoutthebag wrote: »

I don't wish to be a developer.

And on that note....

DRP

hazyjo wrote: »

Don't forget solicitor's costs, EAs costs, van/skip hire, tradespeople, mortgage repayments/interest, mortgage deal costs, the fact you may have to keep it 6-12 months before selling on as someone may not be able to get a mortgage on it otherwise, utilities/council tax, stamp duty.


Margins are way too tight. As above, if the market dips, you'll be back to square one (or out of pocket). I once bought for £227k-ish. Did loads. New roof, kitchen, d!cor, shower, etc - sold for a grand more than I paid due to recession. Same house is now worth around £450k 5 years on.


Sometimes the house value will go up whether you decorate it or not. It's often the market that's added value, not what you've done. I prefer to start again rather than have someone paint it all magnolia and put in cheap beige carpets. I've ripped out two cheap kitchens which 'developers' have put in to replace with my own choice.


Jx

This is what I was going to say - unless you're actually improving the property, any gains will be purely market driven.

A good idea would be to create a dossier of properties that have been turned around in the last 6 - 12 months as an idea of profits to be made.

Grenage

catoutthebag wrote: »

Thinking a way of getting funds is to buy a property needing cosmetic treatment rather than structural (carpets removed, wallpaper stripped, basic bathroom and kitchen)

In my experience, basic cosmetic work doesn't really add value, but it does make a sale quicker.

I sold my house for 33% more than I bought it after 3 years; in that time, I completely redecorated the whole house - carpets, kitchen cabinet doors, fittings, fixtures etc etc. It sold quickly because of what we'd done, but the appreciation was simply due to market changes.

Assuming the market goes up, you could make a bit of money, but the 3% SDLT would be an issue. I think you'd be better off putting spare money into other investments.