I wonder if anyone can give me a few pointers in regard to financing a considerable renovation job (basically the total gutting of 3 bed semi and modernisation - ca. £40,000)
I am planning to sell my current house and with the profits payback any loans/financing required to complete the project
Someone mentioned selling my existing house to a housing association and then renting it back for the duration of the renovation project. Is this viable?
I have/had lots of headroom on my current morguage on my house, so I extended the loan. Borrowing against the house you own/live in is the cheepest sensible way.
Alternativly getting several 0% credit cards to make a total loan of
40K is probably not going to be a big issue, but you have to finish on time, else you will get hammered when the charging starts.
I have used a combination of these two way to finance my project house.
When I have been waiting for a house to sell and a good deal has come available, I have usually been able to refinance the house I am selling, to buy and refurbish the next one.
If you will have the equity to repay the loan when you sell, you should be able to get it against your existing house.
If you end up a bit short, you could max up your credit cards, or take out one of these personal loans up to £15,000.
Sounds a bit complicated and unnecessary - unless you have problems with credit but, as you seem to have 2 houses, I cant imagine that this would be a problem.
if you're in it for the money, keep reminding yourself that it's not your house, you don't have to live there and cut your cloth accordingly. otherwise you can find yourself ovefussing on the quality of fixtures and fittings.
you may expect the best, quite right, but 90% of people don't know the difference between quality sockets, light fittings, rads, boiler, units, etc...
IMO and IME there's more money to be made toshing a property out visually rather than spanking in excess of 30k on a total back to brick refurb. having done both I know which I'm going to focus on in future ;-)
best of luck with your project, with a 40k budget I'd consider engaging a freelance professional project manager with a bit of experience and a lot of indemnity insurance or even a contractor, depending on the %ages.
You can "sort of" do both, you can purchase stuff, or "balance transfer" you bank overdraft to the cards. SO you need a grand cash to pay a guy for some stuff, you "blance tranfer" a grand from your bank account to the card (the bank now has a grand in it) and take it out via the cash point.
If you take cash out on the credit cards, you will find you get better rates of interest from the mafia.
Not quite. Right now the rental income on a property is arund 4.5% of value: Mortgage is 5.5%.
It pays to sell and rent, unless you expect capital appreciation on your property. At the moment this seems unlikely - and indeed the reverse may be true.
depends on three things: finding a battered property, how much graft you personally put in and how many skills you have. and, of course, taking more than a year and a day to complete a project.
I am not in it for the money (well medium term anyway). The house I have in mind is presently owned by my pensioner mother but is in a poor state of repair. I plan to bring it up to modern standards, sell my existing property and move in with her. The house would eventually become mine and I can then continue to live there or sell-up.
I have toyed with the idea of employing a project manager as the scope of work is quite large - it really is a back to the bricks job. Have you any advice on costs of such a thing?
take it from me, you ought to get your mum to move in with you, source finance, do the house up, then move in. under no circumstances try to live there whilst you are doing it up, trust me, I've made that mistake, it's very, very hard work !
I think they usually work on a percentage of the total project, anywhere between
10 to20%, same as a lot of professionals. with a 40k budget you could do a helluva lot right or a helluva lot wrong and paying a fee to a contractor for a turnkey solution could save you and your mum a lot of trouble, especially if you've no experience.
if you do employ a contractor for the job you need a time sensitive contract with stiff late penalty clauses and if the contractor won't accept those terms find one that will.
on my first 'project' I had a 4 week 'contract' drag out to 11 weeks and there wasn't anything I could do except put up with it because I didn't have a /written/ contract, just a verbal one and a schedule of works. the fuc .. contractor had me by the danglies, until it came to the snagging, of course, whereupon I rattled off a list of things that I was unhappy with and told him how much I was holding back from the final £5k payment.
he's still waiting for that £2k but that £2k would have been better spent twoards getting a legally binding contract drawn up, proper schedule of works with detailed specifications regarding the actual quality of materials and silly things like 'all plasterers beads and corner angles must be square and true to within 1mm over 2m' all plasterwork at floor level must allow for the fact that straight skirting will be fitted and not curved, no dogs on site and especially no dog eggs.
You missed my point. Owning a house is currently not worth it in finacial terms.
If house prices are falling and the cost of a mortgage exceeds rent outlay, its better to rent and save the differemnce.
This is irrespective of whether you are doing up a new house or not. The OP was in the position of financing a new home renovation: My advice was not that he should or shouldn't do that, but that selling his existing home and renting was in fact a better bet than taking out a bigger mortgage on his existing property.
Can be nearly as much as a new build. Or sometimes more, if labour intensive fettling required. Hint: When in doubt, rip it out. The trades are beter at installing new than repairing old.
In london total quality refurb jobs are 100-150 a square foot. You can build a barratt superhutch for about 60-70 a square foot.
Budget on 80-100 a square ft for a total 'not been touched for 60 years' jobbie.
What makes you think a tradesman gives a flying f*ck about a legal contract?
Only one thing motivates them. Cash. In their pockets,
You would hav been better off scheduling payments so that there was always more money to come than work to do.
at least 50% of teh tradesemen I met on y rebuiodl privately admitted that they like to go onto a job, get most of the money for half the work, and f*ck off. Leagal contracts? big laugh. Unless you have every single nail and screw specified there is always room to say that whatever you thought was agreed wasn't what HE thought was agreed.
Only if the firm is large, local and with a reputation to lose - and therefore expensive - will they respond top customer dissatisfaction.
And they wouldn't leg you over in teh first place, contract or not.
proper schedule of works with detailed specifications
beads and
no dogs
Yuo. That contract will cost you abouyt 10 grand to draw up and it won't be worth wiping the dogs arse with anyway.
Already planned to have my mum move into my old house - there was no way a
74 year old could live it what would effectively be a building site for 3 months or more.
Purchased a few good books today so that I can read up on all things technical. I am not a hands on person when it comes to practical works but I am a good details man & planner when faced with a project at my office - shame a know bugger all about house renovation (at the moment!)
Dogs on site? Sounds like you employed a bunch of pikeys! LOL
Funnily enough it has occured to me that selling my existing property immediately and then renting a place for my mum and me would make a lot more sense than her moving into my somewhat cramped present accomodation.
I am pretty well set to rip the house apart - there really is nothing worth keeping at all except an Edwardian desk which after a bit TLC would look nice in my new office! LOL
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