Investment or terrible idea?

[gardenwill]

Hi,

There's a property just come on the market near us that is a huge 5-bed old farm house, approx 3700 square feet. On the outside it all looks structurally sound, good brick work, roof etc. On the inside it's not been touched for 40+ years and has a number of big problems, for example shell of a kitchen, collapsed ceilings etc.

This house is priced at the top end of our budget, it's basically a 600k house with a 400k price tag. So if we got it, there's not much budget to spare, it's quite high council tax and oil heating, which must add up for 5 bed house. A survey would reveal all, but it probably needs 200k spending on it to reach maximum potential.

Now I absolutely do not need a 5 bed house and we would settle on large 3-4 bed - but the potential in this house is amazing, as I'm sure the renovation costs are...

I really like the idea of a project house, but we only have maybe 60k left as a renovation budget with no further contingency - which might just cover kitchen and bathroom but not much more!

Would it be crazy to go for this? Fix a couple of rooms and then slowly DIY the rest over the long-term living in ruins! Anyone here done similar??

I cant see it ever losing value, but it would certainly absorb money. I'm really torn because it's rare you see something so nice fall within budget, but it would really push us.

Or is it best to be boring and live well within your means?

Full survey with a builder who can estimate what you're in for in terms of costs. Then reflect. X

We did it and are living in a building site. I love it and am so pleased we made the move. We have just what we wanted for our family. (although I have had a couple of difficult days and I am naturally a very optimistic person).

Be very careful. There will always be something you will find that you hadn't banked on which needs doing which could be costly. It could be a money pit and not worth the stress and time just to make a few quid.

Personally I am stress averse and like to keep a safe amount of money in the bank and never empty it out...because it can be a miserable experience being broke with every penny accounted for before it's earned. It all can lead to a lot of resentment towards the property, making you hate it. I keep well within budget.

I always say be careful what you buy because you may be stuck with it for years and years longer than you intend. Life has a way of throwing curved balls. However I am a cautious person...due to observing others and my own experience [in other areas, not housing].

I wouldn't touch it and DH has worked in property for over 20 yrs plus we've completed some renovations/builds together. You don't have enough of a financial safety net and the fact you mention the outside looking fine shows you don't have the experience either.
Walk away. And if your dream is to complete a property project one day, focus on saving so you can definitely afford the next one that captures your eye and your heart.

Something I wish we’d done pre kids. Although can’t imagine doing it if you have/are planning them

I would be careful if it is at the top end of your budget. Large projects like this usually cost twice as much than expected. Or even more.

It's a money pit

Which is fine if you have the money, but if you don't, you are condemning yourself to living on a building site perhaps for years, with every spare penny going into the renovations.

Don’t do it. You’ll rinse all of your money doing it and will spend years doing the DIY of you currently don’t have the budget to it it

Ovienna is right though. Get a survey and take a builder round and remember old building are full of unexpected expensive extras which won't come up on a survey. Could you live in it as it is?

If you are planning on getting a mortgage, it sounds like it may not be mortgageable, as you say the kitchen is a shell, and mortgage companies like to see a usable kitchen. Or they may just forward money in stages as the works they demand are completed. Sounds like a big financial headache to me in any case, mortgage required or not.

60k to do 200k worth of work is rather crazy. I imagine you could sink that 60k on surprises before you even make it slightly habitable. 200k for a house of that size in that condition sounds like a low estimate anyway.

A friend bought a farmhouse that hadn't been updated for many years , she paid circa £450,000 around 2006/2007 and has spent upwards of 800,000 on it ....

Does it have much in the way of land/outbuildings/stables? You could have a rental income there.

Ex-dh and I passed up on the chance to buy a large and ancient thatched cottage about 25 years ago. It needed a lot of work, and was on the market for about £45k. It sold recently for over £850k. I kick myself every time I drive past.

You can't afford it. That's about all there is to say.