The property sale has completed and the money’s in the bank!!
Now you may remember, this was a property I bought after auction (i.e. it was a property which did not sell in the auction room and was still available to buy at reserve post auction).
For me, the decision to buy was a quick one – the fact was; the property was located less than 10 minutes from where I live and didn’t really need much work doing to it. I knew it was never going to set the world alight in terms of what could be done with it, nor the money which would be made from it. But, you know, I was happy. For me – it gave me a little project to do, which was local and wouldn’t take up a lot of time or money.
The property renovation took exactly 18 days – it was a bit longer than originally anticipated (I had hoped to complete it in 14 days). But, having found out the property needed a complete rewire and the decision to strip the entire property of wallpaper meant I created delays which could never have been built into the original schedule (which was already tight from the outset).
Anyway, I think we did a pretty good job on such a tight budget and time frame – the whole series is on my vlog here: What Sam Bought Today: Diary of a Property Renovation
But, you can also see the before and after photos here:
Front external:
Hallway:
Downstairs WC:
Kitchen:
Lounge:
Store to Study:
Stairs:
Stairwell:
Bedroom 1:
Bedroom 2:
Bedroom 3:
Bathroom:
Garden:
So, now I know the key thing you want to know is the numbers – so without further ado, here they are:
Property Renovation Sums:
Property Purchase price: £147,000
Purchase costs (inc. legal fees & stamp duty): £2697
Finance costs (inc. arrangement fee, security fee, surveyor & loan interest): £3965.32
Materials & labour (inc. new kitchen, full rewire, carpets): £7836.71
Decor and staging: £70.50
Etc (inc. utility bills, petrol): £121.35
Selling costs (including legal fees and estate agency fees) : £1179.60
Total costs (excl. property purchase): £15,870.48
The property was sold for £179.995, so after costs and the purchase price the net profit is: £17,124.52
I plan to post my top 10 lessons from this project next, but the key points worth noting at this stage are:
- Look how little the actual renovation costs were.
- As a proportion of the total costs look how much the finance cost: 25%
- Note how much all the other incidentals add up to – the renovation costs are not even half of the total costs
- Remember I have used a double contingency: firstly the full re-wire and secondly the £10k price reduction
- Note I sold this property myself with Hatched which kept the selling costs down
In conclusion:
As a project, this was as easy as they come. The property didn’t have any major renovation surprises. It was a fun, easy and simple project which I loved doing. It was great to be able to experiment with selling the house with an online estate agent vs. a high street estate agent, and I have loved sharing the ups-and-downs with you all as we have gone along.
Making money from property is possible – however it is no longer the route to riches and overnight success story which so many of us were brought up on in the days of Property Ladder. However, what this real life property renovation does show you, is that with a bit of hard work, some time and some persistence money can be made from buying, renovating and selling property – even in a difficult market!
*NB. The figures altered in my favour from my original post as the bank overstated the redemption figure for the loan which has now been settled.
jason
Hi Sam
Interesting post. It’s still too easy to do the calculation of how much profit divided by how many days to renovate and think easy money but how much time did you spend working on this? I know you were there most days to manage stuff but what about the other times. All the problems with agents. the driving round looking at places in the first place before you found this one, being on your mind before you sold it. These type of things can go bad of course as well so how do you factor in risk? I wonder if you can put a figure on all of this as well?
Sam
Jason – what fantastic points you raise – thank you.
I am going to have to think about that some more as there is no easy answer to your questions. Let me ponder on that for a bit…
suzie bates
Excellent post as always Sam! It’s very interesting to see how much you actually spend on these refurbs, seems you get it done at a great price, very inspirational, well done & keep up the good work girl! x
Sam
Thanks Suzie and pleased the sums help!
Richard
Great job on the sale. You must be relieved and pretty pleased with the outcome. Apart from the conservative budget what other thing(s) would you change if you had the opportunity to do the same property over again?
I am also surprised at the relatively high financing costs, given that we have record low interest rates. Do you see any opportunities to reduce these? I have come across crowd financing that eliminates financing costs altogether. What are your thoughts on these?
Sam
Richard – thanks am v happy!
With regards your points – can I ask you to hang on a little bit longer as my next post deals with your points. I always think it’s best when a project is complete to say “what are my learnings?” – and that’s what I’ll be posting next!
JoKingDevon
Well done Sam. I’ve enjoyed following your journey on this project and glad you made a success of it – never doubted it!
Sam
Thanks Jo – now I just have to find the next one…
WhatSamSawToday
And so I have proven it IS possible to make money from property renovation – even in a difficult climate http://t.co/N7tP2rljd3
Top 10 Property Renovation And Resale Tips
[…] thing which really struck me from my financial calculations is the amount of money I ended up paying for the finance. Not only did I have the arrangement […]
Jacksonville Rental Finders
Excellent points. And thank you for sharing costs and computations. These tips are helpful. Keep it up!
Sam
Thanks glad you like. Great vid by the way – very true!!
Amanda
Sam,
I’m doing a similar project at the moment. I’m wondering if you’ve sold the property within 6 months period? I really want a quick turn around to release the fund, ideally to be sold yesterday. However the 6 months rule is my biggest huddle. I don’t like the hassle of renting it for 6 months (never keen to be a landlord). Do you have any advice?
Sam
Hi, unfortunately not if your buyer requires a mortgage as it is a condition stated in the CML handbook. You don’t have to rent for 6 months – all it means is that you have to have owned it for 6 months before someone else can buy it. Usually, by the time you have done the refurb and the property is on the market for sale and you find a buyer this will not be such an issue (or the delay is only a matter of few weeks).
I did sell a property I had owned for only 10 days (light refurb) before and got caught out – the buyer’s mortgage refused to lend until 6 month deadline. We took a deposit for the property (to be kept with solicitors) and we waited until the time had elapsed before the buyer could exchange and complete (he couldn’t even exchange as the mortgage offer was only valid for 90 days).
In the meantime…I got squatters: https://whatsamsawtoday.com.c75f51a0e536f45b54ba4ec0be709a85-17034.sites.k-hosting.co.uk/2010/08/13/today-i-got-rid-of-squatters-from-my-london-flat/
Amanda
6 months is indeed a long time. The idea of renting is also to avoid possible squatter and security issue (house behind a petrol station). I do find a couple of lenders who are willing to lend for property owned less than 6 months, but they normally require the vendor to produce proof that substantial work has been done to justify the increase in price which I may not get for a liquor of paint. Fingers crossed for meeting an EA next week. 🙁
mason
Did your buyers have any problems with the regulations about not lending on properties where the owner has owned less than six months?
Sam
Hi on this property we had owned it for 6 months by the sale date so this didn’t apply.
Where we had it before (the flat where I got squatters) the buyer had placed a deposit with our solicitors for the property which was non refundable if he changed his mind or was unable to get a mortgage.
On that occasion it was more difficult as the property had only been owned 10 days. That meant the new owner was also unable to apply for finance as mortgage deals expire after 90 days – hence the deposit system which we then used.
JTP
Have you heard anything about the new laws that state a house cannot be resold within 6 months of purchase?
Sam
Hi, I think you mean the mortgage regs? This is the guidance that properties need to be owned for 6 months before new mortgage lending can be obtained on it. It’s do with CML guidelines. Some lenders are now dropping this rule – although for the majority it is still in force. This does need to be factored into your costs and time schedules as it can have serious implications. If you read my post about getting rid of squatters this is exactly what happened there. I had only owned the property for some 10 days when it was sold – but then had to wait for the 6 month ownership rule…in the meantime that’s when I got squatters!
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cultured stone NJ
House stonework is a good way to add value to your home. and it looks good too.
Sam
Interesting idea – although I would think it all depends on the type and style of house and location.
Steve
Hi Sam – great posts. . out of interest where did you source the kitchen units and do you mind my asking how much the kitchen itself cost overall? Thanks
Sam
Hi, Thanks Steve. Kitchen is from Howdens. I will do a detailed cost post next week of everything, plus a photo before and after of whole property. So subscribe/ check back 🙂
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zahur
what has impressed me about your work is as to how you were able to refurbish this flat in this small amount. i need to refurbish my flat and i am wondering where can i find a contractor to do this type of work in this amount..most of the contractors i have worked with have over charged me.
thanks
zahur
Sam
It’s important to work with trades people you trust. I only work with people who come recommended. Once I work with someone, if I like them and they do a good job (and don’t screw me over!) then I stick with them.
Alan Day
Hi Sam, where was this house purchased? I don’t think you mentioned this