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Getting into renovation.

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  • Getting into renovation.

    For around 5 years, I have wanted to get into property development. I have some money behind me and want to get a small rundown house to get some experience with. I am able to do the work myself and with my dad, and he has done houses up and rented them out before. But this one is going to be my own investment.

    I intend to be looking around at auctions and properly doing my homework on a property before I try and purchase. My plan for now is to try and renovate them and make a small profit, then try and build a portfolio of rented properties.

    I was hoping that you could offer me some advice or words of wisdom. This is something I really want to do. I have a fair knowledge of property development through my dad, but I am here to learn

  • #2
    Re: Getting into renovation.

    I think reading through property development blogs and magazines may give

    you some information that can help you in your journey as property

    developer. I would also suggest that you socialize with successful property

    developers, as they could give you valuable advises and tips. Your plan of

    starting with small projects is good. You can use those experiences to learn

    and when you are already well-verse on the field you can start big projects.

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    • #3
      Re: Getting into renovation.

      I would question whether refurbishing to sell is really viable at the lower end of the market at the moment, outside of the South East at least.

      Getting it refurbished and marketed is the simple bit, but a decent profit on paper is very different from a decent profit in the bank. Even over the last year the market has flat-lined in some parts of the North from what I can see - few potential first-time buyers are in a position to be approved for mortgages.

      I have had a nicely-refurbished 3-bed place for sale for nearly 18 months - clean, modern, done to a better standard than it needs to be and no real issues - ideal for a first home. It was originally marketed at a bit under the average of four local agents' valuations and has since been reduced by about 15%. The only two offers have been from bottom-feeding investors looking for cheap buy-to-lets and they have been about 20% under the original valuation. There's little similar stuff for sale locally really, the newly-refurbished houses are all ending up rented and some occupied stuff has been on and off the market forever.

      I could sell to one of the BTL investors and still take a reasonable percentage (if not in real terms) profit, but that's only because I bought so cheaply and refurbished with very little labour cost - I can see that some will not be covering their outgoings. I'd try to avoid entry-level stuff until (if) the market picks up.

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