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Spent 20% of property value on refurbishment: Wondering if..(7 Posts)
Going round in circles with DH on this so could do with a fresh insight into our situation. Long-ish question, bear with me.
We started looking for a 3-bed in west London in November 2012. In May 2013, after a few closed bids where we refused to go over asking price, we eventually found a 3-bed fitting our budget. In August 2013, the vendor pulled out and we lost the money invested so far (solicitor fees + home buyer's survey).
Shortly after that, we found another 3-bed in the area for the EXACT SAME price but needing a full refurbishment (new extension with lots of steel needed, new plumbing/flooring/bathroom/kitchen) BUT overlooking lovely allotments, with a side access, close to tube and a good primary. DH really wanted it (it was two doors down from a previous house we'd missed out on in that street) and I was keen too.
The refurbishment is now almost over, but when we're adding everything up we realise that we've actually invested 20% of the value of the house just to refurbish it. We haven't added any rooms (we will be able to in the future though, if and when we do the loft). We knew what an extension costs, we had a contingency plan, etc etc, but somehow it's never the same to forecast spending a huge amount and to actually spend it.
We're not big earners/spenders, DH just happened to have cash he saved through sound property investments in his early years. We shop at Tesco's, I'm making all my curtains myself with cheap fabric bought at the market, etc etc. To top it all: we're thinking of leaving the UK in 3-4 years (to go back to the US as DH is American) and renting the house.
I'm surprised that I accepted to spend all this money when, possibly, we should have waited for another house to come on the market with less work needed, possibly less attractive, less of a 'wow' factor, but overall a cheaper investment.
DH and I were scared by property prices going up so fast. I was wary of never finding the right place; I was desperate to give birth in our new house (I'm pregnant with DC2, due in April) and start our new family life there. We fell in love with this place. We felt capable of taking on the work needed.
Anyone gone through the same journey? Anyone fell in love with a house and then only realised how much their choice was costing them? Anyone wondering where their property investment have taken them?
Thanks so much.
I think your final sentences say it all. the investment you make has to be right for you at the time. you needed to be settled (which includes a house being habitable) before DC2 arrives, and in the current climate (in west london especially) I can understand your urgency to secure a property and get the job done. If you look around on valuation websites you should get a good idea of how property prices are doing, and I wouldn't have thought that 20% to give the place that extra kerb appeal is particularly toppy. Especially if you want to stay a while (and in london, 3-4 years is reasonable!). and it sounds like your DH has plenty of previous property experience, so must know a thing or two. Is your question really whether you've done the right thing? After all money being put into property is better than it sitting in a bank right now
It's good to hear that investing 20% of the value of a property in refurbishment doesn't seem that pricey.
Thanks so much for your answer, I think I needed something like that: someone to give me an opinion that would help me see the fact that yes, what we did is a) normal for our family circumstances and b) sensible in many aspects.
I agree with flymo, mainly because it's west London, you plan to stay in it a few years and then rent it out. A decently refurbished house in west London can rent out well, with no voids. I know, because we did it (and spent similar amounts to you getting the property up to standard).
Have you had it valued since the refurb? You might have made your money back in increase in value already, and values have steadily increased/sharply increased in London. We're about to spend 30-40 per cent value on refurb/extension and I'm terrified but believe it will be a good investment and we'll get our money back.
I worked out that our house had increased by an average of £25k per year since we bought it in the mid 1980s.
It was a good house in a good position and we've spent money on it over the years (best not to think how much). It's like having another person working for you and yet you get to live in the house.
The good points that you mention about your house are not likely to change so it will always be a good house.
Don't worry! You'll do well with it I reckon.
Thanks so much everyone! Well we didn't have the house valued but two properties in our street have sold for incredibly high prices in the last month so it sounds like we'll be fine. Thanks again, it's so good to have a neutral soundboard.
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