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  • Buy-to-Let

    Next property - refurb or ready to rent?



    Hi

    I currently have 2 properties rented out, these two properties I bought were run down, I renovated, rented out and then released the equity so I have a pot big enough for a deposit.

    My question is, is it to carry out like this rinsing and repeating or just to by a ready to rent to a good standard and rent out immediately?

    The refurbs take me around 4 months and cost between 10-15k.

    I want to continually grow my portfolio so my thinking if I buy one ready to rent I’ll have no equity to release and will have to rely on price rises (who knows) and rent to build up before I am able to get another.

    All advice welcome

    Thanks
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    This is what I do & it does work. However I find I have been progressively taking on bigger and bigger projects with our last one an almost rebuild. As a result I'm exhausted! We are about to start our next one & tbh ive had a bit of a sickner. Maybe intersperse with an easy one or take a good break between works best!
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    This is sounds similar to what I've been up to for some time now as well.

    The internal is mostly a complete rebuild. It's a terrace I'm converting from a 1 bed to a 3 bed, etc, by going up & out and changing the existing internal layout.

    To keep costs down I'm doing most of the work myself. It's way cheaper but takes a lot longer.

    I get the impression that OP gets people in to do the work which is ok but tends to cost more though can be done quicker.

    Looking at the extra cost to rental income of getting someone in it tends to look it's still a paying game to do the work yourself. That said the more extensive the work the more of a pain it can be as opposed to just getting something up and running quicker.

    On buying a second property to rent out I think I will look for something that is a bit less work needing doing. I figure the built up equity in my first house will enable me to do that next time Smile
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    I'm electrician by trade and done everything myself apart gas/plastering/windows/driveway to keep the cost down as much as possible.

    The previous two refurbs i've done were full refurbs but i didnt change the layout/add extra rooms etc

    This being said, it was something i was looking into for my next property to add more value/equity

    I think without doing a refurb again i wont have equity to roll over and help me get another property further down the line

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    Yeah basic refurbs seem to be a way to make some money quite fast, kind of just flash it up and flog it on. I'm kind of working towards a complete redo inside then rent out so maximizing the rent by adding more rooms, it's also a good way of sorting out a more efficient layout if not already and getting the place more suited to rental. Major downside is that once much in the way if walls start to be moved beyond basic studwork the time involved can start getting quite substantial. By the time it's done it will probably equal out with the house/flat flipping method. Main thing though is that I should (hopefully) be left holding a property that is very rentable. 

    Long term I want to be less hands on but need to get the independent income coming in first to work off. Doing a lot of building work myself is something I don't want to be stuck with long term as it can grate a little after a while, hence why I chose to avoid the flipping houses/flats route at least for now.
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    Congratulations on what you have achieved so far!

    Your method is one of the fastest ways to grow a portfolio, but it is being on a treadmill to some extent.

    Perhaps you could look at something less onerous for your next property, such as buying a property with a short lease and getting the lease extended, (see - Investment potential of leasehold properties with short leases Wink or finding a property with a poor energy rating and adding some energy improvements such as a new boiler etc., or doing a loft conversion?

    You could also offer a reduced rent on a property in need of light refurbishment on the basis that the tenant undertakes the work.  This is something I believe Jonathan Clarke does.

    I would continue to view properties and I am sure an opportunity will present itself to you. Smile

    See also - Growing a property portfolio - resources 

    Perhaps also take advantage of a free consultation with PT partner Nova Financial - email pm@nova.financial or call their office on 0203 8000 600. You can learn more about Nova Financial here; https://www.nova.financial .  They assist with business planning, determining your optimum strategy, etc. so may be able to assist you in moving forwards.

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    Hi richo106,

    Congratulations on your already successful portfolio and on your thought to expand.

    If what you are doing works for you already then continue doing it. Do what is best for you and what benefits you most

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    Transparency notice: OneandOnlyPro is a commercial partner of Property Tribes.

    It does wreck you. Its a lot of effort but these are generally the ones no one wants so less competition & good rewards
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    Yes keep going with your strategy  whilst your energy levels are high then stop

    Know your limits

    Get better with each one . Refine and execute each refurb  with precision

    Get the tenants to work for free and save labour costs

    Ones just paid me £500 for a shell 

    And they are the ones who have shopped for the stuff and will be there painting

    Just doing a 3 bed at the mo and leveraging other peoples time

    Dont be lazy and buy something that other people have already been done up

    Its tempting sometimes but leaves a pit in the stomach  as all the potential profit is down the drain

     Delegate when necessary so you dont get overwhelmed

    Then in time you may have 2/3/4 on the go at any one time

    Gradually you become the manager not the worker . Grow into that role

    Just watch out for the wall and know when enough is enough

    Good Luck


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    Jonathan Clarke. http://www.buytoletmk.com


    It really depends on the area and what you can get... You need to get it at a substantial discount and need to take into account all the costs including interest paid on the mortgage and lost rent not just the refurb cost.

     My most successful rental property was a ready to rent, I had a tenant lined up while I was waiting to complete, as it was in good nick I could show them round straight away and they took it, a week of slapping a bit of paint on and that was 6yrs ago, same tenant still in.

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    Refurbs are tiring, but when done correctly they more rewarding in my opinion...

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