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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

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Original poster

Property development

35 replies

ShittyFingers · 02/03/2022 18:24

I really, really want to give this a go. I’m not looking to be a landlord, just fix up houses and sell them on. DH is hesitant as he thinks it will be a load of hassle but I’ve just seen a house in our city, decent area for £15k - days it needs updating (no inside photos, 3 bed, the outside looks ok). Surely at this price it’s a perfect opportunity to test the water with it? Or am I being naive?

Also, can you generally view the inside of auction houses? I’m really tempted to go and have a look.

YABU - it’s not as simple as you think, you’re being naive
YANBU - try it, it’s not going to devalue more than £15k if it does go tits up

OP posts:

TheVanguardSix · 02/03/2022 18:29

If you have the capital, time, and energy to throw yourself into this, it can be hugely rewarding. And I'd totally do this if I could- especially you're in a nice area.
If you're borrowing against the family house though and robbing Peter to pay Paul, it can be a real money pit.
Nothing's ever as simple as you think. But that's no reason not to try, especially if you're in a good position to do so.

MCLQC · 02/03/2022 18:31

Presumably that’s the guide price? It will probably go for much more. As a novice you are very likely to get outbid by someone who has the skills to do it up cheaply.

ThatsALotOfPassionfruit · 02/03/2022 18:38

It’s on for £15k?!

I’d be looking at what done up houses go for in the area and weighing up the difference.

You can usually view ones up for auction and it’s generally encouraged as you have to exchange on auction day if you’re successful.

You need to watch a few episodes of homes under the hammer!

LizDoingTheCanCan · 02/03/2022 18:39

It could well end up costing you more than £15K (and will likely sell at auction for far more than that anyway). If the property is structurally unsound and it becomes a hazard, then you would be liable for the cost of making it safe. If you can't get that done in a timely fashion, the council will commission the work and charge you accordingly.

Blueuggboots · 02/03/2022 18:40

It's bloody hard work and expensive unless you're skilled in lots of areas like plastering.
Me and my partner did up a relative's house after they died. It took almost 14 months all told and became a bit of a drag. It cost £35k, including some big structural repairs and we were lucky because the house was left to me.

Whitefire · 02/03/2022 18:46

It's a tough game at the moment, cost of supplies is rising and tough to get hold of.

"Needs updating" is a very broad brush, my MIL's did. It needed new kitchen, bathroom and full heating system putting in. It looked canny from the outside.

You need to know exactly what you are walking into with the property before making any decisions.

Original poster

ShittyFingers · 02/03/2022 18:48

DH can do all plumbing, electrics, tiling and plastering. He’s a man of many talents bless him. The done up houses in the area go for around £130k

OP posts:

sst1234 · 02/03/2022 18:50

This game is not what it used to be. Unless you have a ton of contacts or the skills and the time to do everything, you will regret it. Getting people in at market rate to get work done will no longer pay due to the insane materials costs. This was a moneymaker once, no longer is.

Whitefire · 02/03/2022 18:50

It will go for much more than 15k then.

BertieQueen · 02/03/2022 18:51

The house is up for £15k and other houses in good condition are up for £130k? Did I read that correctly? if so then something is definitely wrong there.

LizDoingTheCanCan · 02/03/2022 18:52

Does your husband work? If he is going to be doing the bulk of the work, then it needs to be his decision.

You're not going to get a house with a potential value of £130K, for £15K.

HundredMilesAnHour · 02/03/2022 18:54

@ShittyFingers

DH can do all plumbing, electrics, tiling and plastering. He’s a man of many talents bless him. The done up houses in the area go for around £130k

So your (reluctant) DH does all the work? What do you do? Does he work full time already? Can he do structural work or only the superficial stuff? Have you priced up what it would costs for materials even (given prices are currently through the roof) and the impact on your finances of delays in getting them?

Lots of unknown issues with the house, add on all the costs, and then £130k isn't a great selling price.

Elieza · 02/03/2022 18:54

If it’s an auction site they put low prices to encourage people to bid. In the hope they get carried away.

You’ll have to pay capital gains tax. As you already presumably own a house. I think that’s 20% of your profits?

But if you can get the stuff you need and DH can do it I would suggest it will be worth it for the right house. Shop carefully though!

Kitchens are taking ages to be built these days so don’t rely on a quick turn around to make a profit.

Make sure you view it. I’d get a survey too as it could be unsellable when you try and sell it on if it has no planning permission to even be in existence or cost mega bucks if subsiding. Etc.

It’s cheap for a reason….

filka · 02/03/2022 18:59

DH can do all plumbing, electrics, tiling and plastering.
Don't forget that you don't get paid until the house is complete and sold!

tyoy · 02/03/2022 18:59

watch out for capital gains

BulletTrain · 02/03/2022 19:02

It'll go for £60/70k at auction if that's the going rate for finished ones.

My colleague recently bid on a "£50k" house that went for £120k. £200k to buy when finished.

hopeishere · 02/03/2022 19:06

@ShittyFingers

DH can do all plumbing, electrics, tiling and plastering. He’s a man of many talents bless him. The done up houses in the area go for around £130k

You definitely need trusted workmen to do this. Will he be fitting it in round other jobs? Will they always be his priority?

Snowpaw · 02/03/2022 19:07

Sometimes auction properties are cheap because there are only 2 years left on the leasehold, or something onerous like that. Or there can be some issue that makes banks unlikely to lend a mortgage on them. Or they have no floors / stairs.Tread carefully and research fully.

If your DH is the one going to be doing a lot of the work he needs the time and motivation to do it. Otherwise it’s going to take up huge amounts of your weekends / holidays etc. Big stuff like new roof / damp proofing / replastering / re-wiring / installing heating etc can all add up very fast. There are a lot of logistics to manage - endless phone calls to contractors / delivery drivers / arranging dates / making sure XYZ is finished before a different job can be started etc...just a lot of mental work and decision making.

Do your maths and ensure you’re mentally ready for the challenge - it can be really rewarding but it’s not easy money.

BulletTrain · 02/03/2022 19:12

Yes. Have you not watched Homes Under the Hammer?

"How long do you think it will take?"
"12 weeks."
"We're back 3 years later to see how they're getting on!"

Mybestyear · 02/03/2022 19:16

15k for 130k!! If something looks too go to be true it usually is. DH may be able to do these things but does he have the actual qualifications to give out certificates? Saying that - I’ve rarely seen a house under the hammer where they’ve lost money.

Stellaris22 · 02/03/2022 19:18

I hate it when people do this, prices people out of house ownership. I'm happy buying a house that 'needs work', I don't want a perfect house someone did up just as a money earner.

SecretSquirrel111 · 02/03/2022 19:18

You’re beautifully naive. It’ll go for much more and/or if it doesn’t they’ll be some major problem you’re not aware of.

Whitefire · 02/03/2022 19:57

I have had a look locally one was listed for 5k and went for 44k (I'm in the NE, so not unheard of prices), list price means very little.

TinLeaf · 02/03/2022 20:00

It will go for more than that

tinkywinkyshandbag · 03/03/2022 09:00

Don't watch homes under the hammer but do get some proper education. Take a look at Jamie York on You Tube or Simon Zutshi. It's definitely not easy money but the rewards are there - IF you go about it properly.

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