Can I make my self-build dream a reality?
Self_Build_Dreamer
Posts: 4 Newbie
Hi,
First post here although long-term fan of this excellent site! I've posted this question in the 'Loans' section as opposed to the 'Housing' as I'm not sure a self-build mortgage is the only (or best) way to proceed here.
My dillemma:
I have dreamed for a long time of building my own holiday home that I can use myself part of the year, and rent out when not in use to bring in a small income. For a long time this was just a dream, however it might recently have become viable - i'm not sure yet: it's why I'm posting here!
What I want to do:
Buy a plot of land at £90k, and build a small 30-40sqm 1 bedroom, single-story home for what I estimate at £25-35k (from experience this seems viable). I am a cabinet maker / carpenter with some house building expereinece and plan to do all (with the exception of some plumbing / electrics) of the work myself, keeping the design and build as simple as possible.
Total costs expected to be around the £120k mark. I estimate that a conservative annual income I could receive on the property is around £15k (profit).
About me:
Recent graduate and currently part-time self-employed. Approximate annual income currently: £12k. I also have an inherited savings pot of around £40k. I have no debt (aside from a student loan) and currently have an 'excellent' credit score.
My question:
Is there anyway I can borrow enough money to make this happen through whatever means I have available. Open to all creative suggestions and ideas!
Thank you in advance for your help!!
First post here although long-term fan of this excellent site! I've posted this question in the 'Loans' section as opposed to the 'Housing' as I'm not sure a self-build mortgage is the only (or best) way to proceed here.
My dillemma:
I have dreamed for a long time of building my own holiday home that I can use myself part of the year, and rent out when not in use to bring in a small income. For a long time this was just a dream, however it might recently have become viable - i'm not sure yet: it's why I'm posting here!
What I want to do:
Buy a plot of land at £90k, and build a small 30-40sqm 1 bedroom, single-story home for what I estimate at £25-35k (from experience this seems viable). I am a cabinet maker / carpenter with some house building expereinece and plan to do all (with the exception of some plumbing / electrics) of the work myself, keeping the design and build as simple as possible.
Total costs expected to be around the £120k mark. I estimate that a conservative annual income I could receive on the property is around £15k (profit).
About me:
Recent graduate and currently part-time self-employed. Approximate annual income currently: £12k. I also have an inherited savings pot of around £40k. I have no debt (aside from a student loan) and currently have an 'excellent' credit score.
My question:
Is there anyway I can borrow enough money to make this happen through whatever means I have available. Open to all creative suggestions and ideas!
Thank you in advance for your help!!
0
Comments
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Your credit score is irrelevant, your credit file is the important thing...
also, whilst I'm being relatively unhelpful, I think you need to put in some pretty generous contingency on that £120k budget. Cost overrun on creative projects such as this is mandatory.The views expressed here are my own. I am not a Solicitor nor am I affiliated with any of the parties I mention. If you disagree with any of my comments please say in whatever way feels most natural to you. No one self improves in a bubble!0 -
Hi, thanks for the clarification on the credit issue.
Yes, I agree on the contingency: if I add a 15% contingency to the land + build costs we're at £138k.0 -
A one bedroom house immediately means limiting to couples / singles and it's a very competitive market thanks to comparison sites and trip adviser
15,000 profit / 40 weeks (assuming you live there 3 months) is £375 a week profit, let alone the income and expenditure of cleaning, buying/replacing the day to day things people need. Don't forget as a holiday let you need basics like fridge/freezer, oven, microwave, TV, internet etc etc and need them to be kept in very high order.
We stayed, as a couple, in the channel islands in rented places, end of season sure but around £500 a week got extremely nice houses, one was modern and extremely well kitted out, the other a huge farmhouse that could sleep 4. Obviously you charge more in peak but really you're looking at 2-3 months at high rates. If you're staying there in peak season you aren't making money. Do budget more carefully0 -
Hi Nasqueron,
I based my approximate rental figure on the following formula:
- 45 days a year personal use.
- £90 per night all year round in a extremely popular holiday destination all year round (this figure based on similar properties).
- 75% occupancy rate. This sounds high but seems realistic based on my research. Perhaps it needs revising?
- £40 per week cleanng fees (assuming lets between 3 - 7 days).
- 15% wear and tear costs.
- 7% agent / air BnB fees (a total guess here, I admit!)
...the one thing I've yet to factor in is furnishing the house, although this shouldn't be astronomical because its essentially a bedroom / kitchen living area / bathroom. I should really do my sums on this.
The most important thing in these figures is to make sure I can bring in enough to cover loan repayments. Can anyone verify if any of these figures are wildly innacurate?0 -
You've got an income of £12k.
No lender is going to touch this with a bargepole."Facism arrives as your friend. It will restore your honour, make you feel proud, protect your house, give you a job, clean up the neighbourhood, remind you of how great you once were, clear out the venal and the corrupt, remove anything you feel is unlike you... [it] doesn't walk in saying, "our programme means militias, mass imprisonments, transportations, war and persecution."0 -
Haha! To be honest, this is what I thought although I hoped there might be a creative loophole using my savings to make repayments on loans.0
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For ideas on the design and construction, look up Irish vernacular, if you haven't already heard of it.
This is a self-build timber frame by an Irish architect Dominic Stevens for €25,000, which suggests that part of your scheme can realistically be in range.
Probably need a bit of a windfall on the overall finances or land though.0 -
Self_Build_Dreamer wrote: »Hi Nasqueron,
I based my approximate rental figure on the following formula:
- 45 days a year personal use.
- £90 per night all year round in a extremely popular holiday destination all year round (this figure based on similar properties).
- 75% occupancy rate. This sounds high but seems realistic based on my research. Perhaps it needs revising?
- £40 per week cleanng fees (assuming lets between 3 - 7 days).
- 15% wear and tear costs.
- 7% agent / air BnB fees (a total guess here, I admit!)
...the one thing I've yet to factor in is furnishing the house, although this shouldn't be astronomical because its essentially a bedroom / kitchen living area / bathroom. I should really do my sums on this.
The most important thing in these figures is to make sure I can bring in enough to cover loan repayments. Can anyone verify if any of these figures are wildly innacurate?
I suspect there will be letting firm forums that cover stuff like this and what you can realistically expect to pay in fees etc
I'd budget for 50% occupancy and go from there, if it is 75%, great, if it is 50% you're still covered. Even in good holiday locations outside of the peak June-August time and half term you will find fewer people going away and houses going spare - remember you're looking at couples only so no chance you'd rent to a family looking for cheap outside term time holidays and as soon as you're away from school holidays the prices tank. £40 a week cleaning - 4 hours at £10 an hour (the places I have stayed in are usually checkout 10, check in 2) - even if it's a reliable cleaner who is available at those times, I bet they charge a fair bit more, or you get a half arsed job. In popular areas the good cleaners will be going to the highest bidder and you need to ensure they're in and out quickly. You only need 1-2 bad reviews on trip adviser or similar and you're immediately losing business
If you're in there 45 days ~ 6 weeks a year if it's the middle of summer that's losing money...0 -
You need to get past the first hurdle of buying land with permission to build a holiday let and financing it.
Youre probably there with your side of a deposit youre quite far away off with the earnings.
You need to either save a lot more or earn more. Before you even think about occupancy rates.0 -
God loves a trier. Unfortunately, this isn't University anymore. This is real life.
The fact is that you're income isn't enough to turn this from anything else but a pipe-dream.0
This discussion has been closed.
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