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1st BTL - 3-Bed Terrace


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Hi all,

I have recently had an offer accepted on a 3-bed terrace in my local area. I intend on fully refurbing the property and extending into the attic for a 4th bedroom.

Please can you critique my deal!

Please let me know if you think I've missed any key items.

Any other questions, just let me know!

Dean

Deal Breakdown.png

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1 hour ago, julian pletts said:

Looks good to me. Great ROI if it pans out like this. My only question would be is it worth the effort for a rental of converting the attic in terms of extra rent you will get? 

Hi Julian,

Thanks for your reply. 
 

This is an end terrace. The mid-terrace 2 doors down converted the attic and sold the house 2 years ago for 140k. For the additional work involved due to stripping the whole house down anyway means the loft conversion is a straight forward job especially with the traditional trusses.

I am relying on the house price getting to the 140k mark so I can remortgage to the level where I manage to get nearly all the money back out. I don’t think I could achieve this without the conversion.

I agree, for the additional rent it won’t be much difference really.

This will be my first rental and when I saw it came up and looked at recent house prices it just jumped out at me that it would potentially make an almost free rental property.

Is there anything in the running costs you think I may have missed or undervalued?

Regards,

Dean

 

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Hi Dean,

I'm just buying my first BTL too, exciting isn't it?!

Have you accounted for the cost of a survey if you're having one? Also, maybe accounting for any periods when the property is empty between tenants?

Good luck,

Lynn

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Not sure what's included in your renovation costs, but you'll probably need to pay the council tax whilst it's empty. If it's all cash, then probably no real costs, but if borrowing anything, remember to include for the finance costs of that. You'll also have another set of legal costs when you remortgage, plus survey and if through a ltd company you'll need independent legal advice.

Aside from that, if you're confident of the resale costs.and your refurb costs are accurate (unless there's anything structural, they should be ok depending on the cost of the loft conversion) then you've found a cracking deal. You usually find things being sold for £75k needing a refurb will only be worth £100k when done!

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On 7/11/2020 at 10:12 PM, dino v said:

Not sure what's included in your renovation costs, but you'll probably need to pay the council tax whilst it's empty. If it's all cash, then probably no real costs, but if borrowing anything, remember to include for the finance costs of that. You'll also have another set of legal costs when you remortgage, plus survey and if through a ltd company you'll need independent legal advice.

Aside from that, if you're confident of the resale costs.and your refurb costs are accurate (unless there's anything structural, they should be ok depending on the cost of the loft conversion) then you've found a cracking deal. You usually find things being sold for £75k needing a refurb will only be worth £100k when done!

Hi Dino,

Thanks for your response.

Renovation costs were simply the renovation works only to be fair. They didn't include council tax, legals etc. This is something I will definitely add in to my spreadsheet as we all know, the devil is in the detail which is exactly why I came on here to ask more seasoned investors.

I agree completely with properties now. It seems almost impossible at this price bracket to find a property that you can make a decent profit margin on. I can only put it down to the condition of the property and the fact it fell through with the last "cash buyer" (at £83,500). I believe they've ran out of patience and want it gone.

The amount of offers I put in prior to this on similar properties that went for far more than anyone with sense would pay was painful!

Regards,

Dean

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