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I currently have one rental property, I've been running it as a HMO for about 7 years.
Right now I'm just considering my options on how I could grow what I have.
I've been looking at buying more buy to lets, however I'm in Edinburgh and yields aren't great (5-6% for one bed flats).
The other option that Vanessa pointed out to me on another thread was refurbs with bridging finance and either selling on or converting to buy to let mortgage. This really appeals to me, however with a full time job I'm not sure it's really possible.
Has anyone here managed to balance a full time job while having doing refurb work? Obviously refurb is a very broad term. I guess I'd like to try something small, build my confidence/knowledge and gradually try bigger things.
I'd be really interested to hear any stories on how you got into refurb / development.
Hi Benny ,
I will follow the replies you get as im in the same place as you are. I never done a refurb however based on my reading on the subject I would say that it is completely possible to refurb while in a full time job . It requires more upfront preparation but many people have done it successfully.
The attractive point about heavy refurb is that you may be able to avoid paying stamp duty if you can demonstrate that the property is not suitable for human habitation unless the work is done. Could be quite a saving !
A concern I have with the strategy of buying / refurb / sell at a profit is that this strategy works best in a growing market . If the market is idle or decreasing it is a risk to be clear about.
Good luck !
The case won where they didn’t pay stamp duty was a building that had to be knocked down so do not look to much into this. And unless you have some to manage to rebuild it is not possible to have a day job and do a complete refurbished.
A light refurb is possible and I’m talking about paint the walls and a few minor other stuff. But everything else is hard work to manage and often you need someone there or a very trusted builder.
I have done big renovations (flooring kitchen windows) on my main property when I was living there and it took a long time to finish it.
I’ve recently done this. I work full time in London and brought a house an hour away from me. It is challenging but manageable, preparation is key, getting builders into the property whilst you are in the process of buying it to get ideas and quotes is important. Be prepared for the project to cost 15% more as you can’t be so hands on. You can’t trust the builder to do a turn key so regular visits in the evening and weekends was important. I have 2 Young children to add to the mix!
This project was a great learning because I employed a handy man to do things like install kitchen and bathroom and other bits around the property and he would oversee any trades that we needed (plumber Electric’s etc) I paid him to oversee the project and the most invaluable lesson learnt was understanding line by line what things cost.
the regret was using the handyman as he was full of hot air and cost me for his mistakes. I now have the detail of what each thing cost and will therefore be more clinical when I get future quotes as I intend on using one contractor for the next one
The property took 13 months from purchase refurb to sell..
I have recently done two major refurbs and me and my partner have more than full time jobs. I run another business as well.
If it is a big job including rewiring central heating, a new bathroom and kitchen, get yourself a builder. Get him to quote a fixed price. Be very specific about what you want and what is included.
What enthusiastic amateurs forget is that time is money. While you are mucking about trying to save £300 fixing something, a builder could do it in two hours for £50 more, and you are still paying either paying a mortgage or a bridging loan.
Every day you save £50 doing it yourself, you will be losing more on the holding costs. Factor in ten grand at least for holding costs- mortgage or loan or council tax or electric or gas bills etc.
A builder will cost you more, but get it done quicker and reduce your holding costs. If you let it three months earlier using a builder, at a rent of say £800 per month rent, that's £2400 saved plus council tax etc. Hold 10% of his fees back at the end for snagging. He will expect that.
If you sell it earlier your loan costs are less. You also have the time going to Wickes or Howdens or B&Q and travelling to and from the job to factor in. While it is fun (mostly) and rewarding to do it yourself, it can be long and tedious and a false economy. It can also be knackering while you are trying to cope with a job and family. You will also turn your car into a tradesman's van. Dust from plasterboard is a sod to get rid of.
If it is a light refurb then it tends to be easy to act a project manager to get a carpenter in and a decorator etc. You will find that the decorator knows someone who can do the electrics and any plumbing etc. I have done several of those and it works OK. Good luck.
Thanks for the responses folks.