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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

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:
Itloggedmeoutagain · 03/03/2022 09:08

@filka

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!
And don't forget that while he's doing that he's not getting paid for other work
RitaFires · 03/03/2022 09:22

Get a solicitor to check out the legal pack, lots of properties are put in auctions because of legal issues that make them unmortgageable, access, boundary disputes, etc. If you can't sort those you won't be able to sell on for a profit as you'll be stuck with the limited pool of cash buyers.

yoyo1234 · 03/03/2022 09:32
  1. it will probably go for (a lot) more than list price.
  2. it will probably take a long time to renovate (material shortage and labour shortage).
  3. it will probably cost a lot more to renovate than planned (material shortage).
  4. Capital Gains Tax on profit.
  5. Why so low a list price - is it mortgageable for your buyers?
Halllyup17 · 03/03/2022 10:05

I saw one on for £30k the other week. It went for £200k at auction.

You could spend thousands doing it up and if there's a ceiling price of £130k then you could potentially end up with really small margins once you've factored in all the extra fees that'll be payable. It doesn't sound practical to me.

Van34 · 03/03/2022 10:34

I think it would be foolish. Especially when your DH seems to be unsure but would have to do most of the work.
We bought a renovation, all be it our forever home, but it has taken us 3.5 years. Every leave day and every weekend with only Christmas day off, and that's with both of us being practical and sharing the workload. This is on top of full time jobs.
Factor in the increased cost of materials and the hassle of contractors when needed.
I'm sorry to say but it is not an easy win, it is not a quick process and if your relationship has any cracks already... they will open right up.

tealandteal · 03/03/2022 12:07

Even if it does go for 15k, you would need to pay for all materials, any specialist trades, insurance water electric etc as well as your own bills. If your DH is only doing it in his spare time that could be for quite some time. There might be significant costs eg new roof, new windows, structural work etc.

Lastqueenofscotland · 03/03/2022 12:17

QS here….
It will go for more than that
There is a massive issue with supply of materials at the moment. And what you can get hold of will be extortionate unless you are buying in scale. Which you won’t be for one house.
The tax laws have changed so it’s not the easy and highly profitable enterprise it was in the 00s.
I know people who do it and make money. They are all QS/estimators/PMs etc so have the really sound up to date business knowledge. They also have HUGE portfolios as you will get the odd absolute howler that you think is a 3 week turnaround and turns out to be subsiding. Which is a serious risk as many auction properties are at auction because they are not mortgagable. Unless you have tens of millions of pounds to fill an old mineshaft with foam concrete this will be an issue regardless of how done It is.
A lot of people lose a lot of money
Auction turnarounds mean you can’t properly do your research. They are cheap as the cost factors in the risk.

garlictwist · 03/03/2022 12:24

There's a house on my street that was bought by a developer and done up to sell. Only it hasn't sold for two years. I don't know why (other than they have made it very grey inside) but I often wonder how much money they are losing whilst it's not shifting.

Paperplain · 03/03/2022 21:52

Yea you're being naive if you think it will go for that price!

WulyJmpr · 03/03/2022 22:06

Bit funny to say I really want to give this a go whilst clearly expecting DH to do the work.

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