I am thinking of getting into the property development world, I have seen a property up for auction the guide price is £75,000+ but i am expecting it to go for around £85-90 and I think when done up ( new kitchen/ bathroom/ wiring / central heating and boiler and internal decoration i have estimated around £10k its a 3 bed terrace) it should fetch £115-125. I suppose my question is are there any key rules i should abide by, any tips you wish you had known when you started etc, other advice and (dis) encouragement.

In terms of myself it will be my first renovation, I am a recentlyualified building surveyor so know a reasonable amount about construction and property problems and I have some carpentry and DIY experienceI would be looking to do as much work as possible, such as fit the kitchen, bathroom and all the internal decoration and do the donkey work for the trades such as remove the floorboards, build stud walls etc.

Any advice appreciated

Mike

Take fees etc into account and there isn't much profit left in that lot.

£10K for new "kitchen/ bathroom/ wiring / central heating and boiler and internal decoration"

You doing all that yourself then I take it 🙂

Sounds way under to me but I'm not an expert by any means.

Agree with 'pies. £10K for all that does sound a little optimistic. Add in a couple of months mortgage (I assume you need to fund it), solicitors, HIP, estate agents etc. and I'd be looking at more of a selling price to make it really worthwhile.

and won't you make more money just working as a QS? Those property TV shows always forget to mention that, 6 months hard graft for 10k, and that's if it all goes well. mmm.

Heard a good bit of advice from some annoying estate agent type bloke on a property development show, "You make your money when you buy the house, not when you sell it"

Seems very true

I am a recently qualified building surveyor

Well in that case you'll know that refurbs are notorious for their unknowns. Going by your figures, if you double the (extremely low) refurb costs which you have estimated, due to unforeseen issues, then that's your profit gone.

I have been looking at

2-3k for central heating
1-1.5k for rewiring
3k for kitchen
1k for bathroom
2k decoration and fees/ contingency

what do you think of these estimates, the property is essentially a 2 bed terrace with a converted loft in sheffield.

EDIT: I am afraid i am just a Building surveyor not a QS … oh to be a QS plenty of jobs but dull not for me.

Mortgage fees will be very low as i have a large deposit, but I supose I have underestimated estate agent/ solictors/ HIP fees. In terms of time period I am estimating 4-5 months. A £15k return over this time period will be above the income I could expect from a job especially given the fact that building survying jobs are pretty slim on the ground at the moment.

But in true tv property style I have underestimated costs

I'd hang on for another 12 months before investing my own hard earned into a property.

20% extra for things you will want to buy… £1k kitchen doesn't buy you much!

I'm in Sheffield, and have a fairly broad knowledge of the area, roughly what area or postcode are you in if you don't mind me asking.

I'd also consider waiting until next year as (i am told) property prices will drop some more (by another 10-20%)
jt

Its S10 crookes

consider waiting until next year (i am told) property prices will drop some more (by another 10-20%)

Not everyone agrees :

http://news.bbc.co.uk/1/hi/business/8181945.stm

TBH I can't for the life of me imagine why property prices would fall by 20% before next year.

Property developing/Renovating was made to look easy (read: easy money) over the last ten years, you simply couldn't lose with house prices rising unsustainably as they were. I'd wait a little longer.

In terms of House prices , who can tell there seems to have been a resurgence in Europe although the Uk is still in recession, whether this will kick start our economy I dont Know , i think its unlikely in the short term. Its is in a good area with strong student / professional demand.

I agree I have underestimated the costings and more research is needed any tradesmen want to give some rough estimates ?

Crookes is a nice enough area!

The thing is, as i understand it, the government have spent so much money on banks and god knows what else, its going to take a long time to get that paid back, and if property isn't bought (while it is, its not selling as quick and as often) prices are going to have to come down so more to get more money put back into the economy.

The Beeb, while I enjoy reading the beeb news, it is a government outlet for news, and I can't quite imagine them publishing a headline "property prices set to fall another 20% over the next 18 months or so" (don't bother moving or buying yet, as we're all doomed) … can you?

Maybe I'm wrong, but i'll hang on until next year before I start looking to buy.

Personally (after a long property renovation) and I sort of work in the property services game, if it goes for 75k then happy days, 85 and you'd be squeezed, then *if* prices fall further, i can only imagine things being very tight indeed!

Also, you'll need plenty of tools too, don't underestimate the qualities of having the right tool to hand. even building stud walling, a chop saw works quicker than a hand-saw, an electric plane works quicker (mind your fingers! (looking at my hand)) plumbing is a piece of cake though, easiest 'big' job i've ever done (re-plumb of the first floor in my old house) plasterboarding is straight forward too (don't forget a good quality rasp)

its really enjoyable, but has potential to reduce you to tears at 2am while you havent taken a shower for a few days, you have fiberglass wool itching you, you cant go on your bike as the house needs work, your friends are all 'busy' and your bathroom hasnt had the bath fitted due to your SDS clonking out saturday night and not being able to re-drill through the wall for the waste pipe!

good luck 😉

It cost me £20 k to refurb a flat with new kitchen, new internal walling, – so I think you are being hopelessly optimistic.

Monkey – I'm in the middle of a house refurb. New roof, bathrooms, bedrooms, boiler, water tank, 'lectrics. If you are doing it yourself, I don't think the numbers look too bad except for the CH.

Go for it, I reckon prices will be rising again soon, and if you buy at auction, it should be below book anyway. Good luck.

It cost me £20 k to refurb a flat with new kitchen, new internal walling, – so I think you are being hopelessly optimistic.

I think your right in that my prices might be optimistic but it would never cost me £20k for a new kitchen and internal walling for this property. I can get a brand new kitchen with units and oven / hob fitted for £5k Was this in London

Property developing/Renovating was made to look easy (read: easy money) over the last ten years, you simply couldn't lose with house prices rising unsustainably as they were.

On a lot of the property programs I've seen the people did lose, they made less profit than if they had simply kept the property for 6 months and then resold, so they'd actually paid to do a lot of hard work!

geoffj – Member

Monkey – I'm in the middle of a house refurb. New roof, bathrooms, bedrooms, boiler, water tank, 'lectrics. If you are doing it yourself, I don't think the numbers look too bad except for the CH.

Go for it, I reckon prices will be rising again soon, and if you buy at auction, it should be below book anyway. Good luck.

Hi geoffj, where are you working , do you think these prices are reasonable then for sheffield. What would you estimated the CH plus combi boiler to be ? maybe 3-4 k