Buy to sell ?

catoutthebag

Hello

I've seen a flat come up for sale in the development I am in.

Needs doing up and is priced accordingly.

Prices here have shot up and I've kept an eye on prices and done bits to my property.

Some things I'll need help with, but being aware of costs (same size as my place), there's still strong profit to be made.

Is there a thing as buy to sell mortgages? I'm looking at a turnaround time of a couple months max.

I have funds towards a deposit, but think some sort of interest free loan might be viable, to save cash towards making it habitale.

I know there's quite a bit of pessimism and negatives and those who don't like taking risks on the forum, but I'd rather hear from positive, productive minds on this one in order to make a decision if it's worth it

Ty

Mr.Generous

I'm not generally convinced there is enough profit it property development that just requires a bit of decoration to make anything. You are adding in financial charges for borrowing which we don't face although if you can sell it quickly enough you can reclaim the 3% stamp duty surcharge you will pay. Property needs to be worth £30k more when renovated than it is for sale for to make a viable project.

Don't forget on a buy to sell....
legal fees x 2
estate agent fee
utilities
council tax
materials for renovation
labour cost or your own time
It takes two of us 3-4 months to renovate a house full time working.
it costs about 10 grand
that leaves 20k which we split.
the sale can take months, each month the property is empty eats about £150 off your profit.
If you have a loan to repay this will be torture!
think carefully!

ViolaLass

Can't you use a normal mortgage for this purpose? Just don't get a deal with ERCs.

catoutthebag

Thanks for your replies. It is a 1 bed flat like mine.

Guy who did my bathroom is a plasterer too and made about 30k on the same development.

Rough costs depending on a sale price (oiro 5% below) and fees etc, net profit after work (needs painting, possibly skimming, all 70s carpet removed and laminate down, retiling bathroom + kitchen floor, new kitchen units, new bath + toilet)...from general inspection , looking at 20-30k net profit based on my property value and recent sales...in my pocket. £ going towards savings. Not towards doing it again ajd again, but where I spot any opportunity, it needs ceasing.

Course it would be a painful couple months or so, but I'm 5 seconds away from the property

Just need to figure out , if I could get a mortgage and best mortgage type.

Pixie5740

If you're buying a property to flip then it's commercial lending you need and you will pay income tax on any profits.

I very much doubt that updating the decor was responsible for the profit your plasterer made. It was most likely down to the market rising in the area. Doing a property up will make it easier to sell but doesn't necessarily mean it will sell for more or at least not enough "more" by the time you've taken into account labour and materials.

elverson

When you come to sell your buyers might find it difficult to get a mortgage (if they need one) due to the 6 months rule.

https://www.cml.org.uk/lenders-handbook/englandandwales/

scottishblondie

Mr.Generous wrote: »

if you can sell it quickly enough you can reclaim the 3% stamp duty surcharge you will pay.

Can I ask what has led you to this conclusion? I've never heard this before and I can't find anything to support it online. AFAIK the only way to reclaim the charge is if you have bought a new main residence without selling your previous one, but then sell it within 36 months of the purchase.