Struggling to find renovation project to make money on?

[Turnish]

We live in London. Looking to buy a renovation project somewhere fairly central and work up the ladder like people always advise. We can afford up to about a £1mil. But I can’t seem to find any renovation projects? Those that exist are for sale at such a high price that there’s no money to be made

No such thing, you been sold a fallacy.

Houses can work as investment but it takes a long time. People who bought for £5,000 in 1971 can likely now sell for closer to £200,000 but it didn't go up in price in a year or two it took half a century.

Have you seen the state of the market? also by November it predicted the the capital gains tax will sky rocket again so bare that in mind.

Doer ups are priced at value minus the cost of the required work, they aren't just magically cheap so you can make lots of profit. You are not owed lots of money from buying houses super cheap then charging others loads, no one wants to pay loads (just like you don't) especially not for landlord fix style referbs which is all you can do unless you already have a buyer and do it to their tastes.

The reason you can't find anything cheap is because many idiots bought into the stupid self strangling 'ladder' concept and drove prices through the roof, shitting on their kids and all future house buyers.

It goes hand in hand with other ridiculous outdated advice like the older generations who say 'Just get a council house, then buy it cheap and sell it on full price like we all did'.

Funnily enough, we are in the process of buying this property - with the amount of work needed we won’t make any profit. As we aren’t buying it to ‘flip-it’ and plan to live there for many years we are ok with that.

How exciting! It has loads of potential. Speaking as someone who bought a house that needed everything doing, it's great fun, extremely stressful and then lovely to live in a house that's exactly what you want it to be. I hope you have many years of happiness in it.

Flipping only gives profit if your in a trade now.

We bought a 3 bed and extended into a five bed years ago. It's worth the same as next door plus the cost of the extension. My dh is in a trade so did work at cost but he couldn't do it all or it would have taken years.

However if you went 20 miles out of London and have a ruthless streak, my home town is in the process of developers turning all victorian homes into HMOs. I guess the market will fall out of that soon as you can imagine the area is turning into somewhere that no one with options wants to live anymore. Unless you need a bedsit which it seems is never ending revenue stream.

I think a lot of people are finding the same right now – the numbers just don’t stack up the way they used to. Renovation costs have gone up so much that unless you can do a fair bit of the work yourself (or have friends in the trade), there’s not much profit left once you add stamp duty, materials, and labour.
If you’re mainly looking at this as an investment, you might get better returns by buying in an area with more growth potential rather than relying on renovation alone. Another option some people are taking is a “live-in project” where you update gradually over a few years, so you benefit from market growth as well as the improvements.

Out of curiosity – are you hoping for a quick flip, or more of a medium-term home that will hopefully rise in value?

That’s a really good point — the profit margins on renovation projects have definitely tightened. Material and labour costs have gone up so much that even smaller refurbishments can eat into any potential gain. I’ve noticed too that the only way it seems to work now is if you’ve got trade contacts or can handle some of the work yourself.

I’m leaning more towards a medium-term home rather than a quick flip. The idea of improving a place gradually while the market grows feels a bit more realistic right now, both financially and stress-wise. Curious to see if others are finding similar in their areas too.

I have a lot of opinions re your post OP.
As others have said, buying a project just to make money is the wrong way to approach this now.

1. if you want a total renovation project is your £1m a purchase price or purchase + renovation? A project like this is generally based around threes eg 1/3 is the purchase (inc fees), 1/3 is the renovation cost, 1/3 is the uplift in value, then you probably have some tax to knock off + fees from any 'profit'.

2. I'd suggest you look at something much lower price point that needs 'doing up' rather than full renovation. you could turn several of these around reasonably quickly if you buy well and know what you are doing. This is more likely to help you progress more swiftly, BUT the housing market is dead at the moment. That benefits you for buying with a strong offer but difficult for selling.

3. Advertised prices are a guide, and many properties are being marketed with an inflated and unrealistic price. Nothing wrong with cheeky offers. £1m asking you could get £150k off. That doesn't mean you have a bargain, it means that's what its worth, but it does give you potentially more to work with in improving it / sell on value.

I'd seriously suggest you look at something at say £500k, do it up, move on.

The original post was from a year ago, I wonder what the OP ended up doing?