Housing market

62tucker

Regular member
Site Supporter
Joined
Jan 30, 2010
Messages
14,295
I admit I know not much about it. Never sold a house in my life. Only bought 1 that I live in now.
After 3 years after my Dad past way for various reasons we (me and brother ) got to put his set of flats up for sale last Monday. Both up and done terrace houses both are a near enough complete refurb job. We had rough estimate of between 30 to 50 k to do them up. So we were told we might get £90k if we lucky but be prepared as the market is slow ATM. Some been on sale for months in the same street. The estate agent are handling everything from viewings to solicitors. Viewing on Monday resulted in a bit of £75k then a £80k without them even viewing it ?‍♂️. More followed throughout the week ending at a 102k on Saturday. We decided that was canny good but there was a viewing tomorrow (Tuesday) so said we wait till then. Then today a new viewing turned up and offered £110,000. ??
This might not be a normal housing market sale as they probably all developers. But all hopefully settled in a week and a half, hopefully anyway.
One thing I did notice. Not many English names on the viewing list.
 

crackatoa

Regular member
Site Supporter
Joined
Jan 18, 2015
Messages
6,343
You don't say how many flats but renting out would surely give you a better return than investing the money. Even if you use an agent
 

JohnLondon

Regular member
Site Supporter
Joined
Aug 7, 2017
Messages
1,809
It certainly sounds like they’re developers, especially putting in a bid without viewing the property. The fact that you have had quite a few bids, it would suggest that they are desirable properties & will have good rental potential
 

TrickyD

Regular member
Site Supporter
Joined
Jun 18, 2018
Messages
3,594
If you watch "Homes under the hammer" you will get a good idea of the prices paid for places needing work, and the money they make after toshing them up for a quick buck. Rental seems the way, and a lot of the purchasers seem to corroborate your statement regarding the names on the viewing list.
 

Dave

Red Leader
Staff member
Site Supporter
Joined
Aug 8, 2001
Messages
65,270
Looking at top figures from your post - £110k worth of flats, £50k to do them up, total £160k

Actual cost to you and your brother, max £50k (assume value region £140K)

Rental income (4 flats? ) £400- £450 per month per flat (total £1600-1800 per month split two ways)

Or set up a limited company and use a good accountant to transfer the properties to the company via director's loan accounts.
Repay you and your brother the initial value of the loan (£110K plus renovation costs) from rental income - no tax to pay for five years approximately,
At end of five years your company will still own the assets and as joint shareholders it will then be up to you if you want to sell at a possible profit as you'll have proven rental incomes, or continue letting.

The figures are rough and depend on many variables but food for thought rather than just taking pay off now and having nothing to show afterwards
 

Dave Spence

MD virtual champion 2020. Golden Pie winner 2018.
Site Supporter
Joined
Feb 19, 2017
Messages
8,344
Looking at top figures from your post - £110k worth of flats, £50k to do them up, total £160k

Actual cost to you and your brother, max £50k (assume value region £140K)

Rental income (4 flats? ) £400- £450 per month per flat (total £1600-1800 per month split two ways)

Or set up a limited company and use a good accountant to transfer the properties to the company via director's loan accounts.
Repay you and your brother the initial value of the loan (£110K plus renovation costs) from rental income - no tax to pay for five years approximately,
At end of five years your company will still own the assets and as joint shareholders it will then be up to you if you want to sell at a possible profit as you'll have proven rental incomes, or continue letting.

The figures are rough and depend on many variables but food for thought rather than just taking pay off now and having nothing to show afterwards
Spoken like a true businessman Dave; great advice. Most people are usually not prepared to put up wth, what they consider is 'hassle' and would rather take the 'quick' payoff. In actual fact, if the hassle is 'farmed out' to the accountants, letting agents etc. the process should be quite smooth.
 

Dave

Red Leader
Staff member
Site Supporter
Joined
Aug 8, 2001
Messages
65,270
From a financial point it makes more sense to let them as described above even if they are sold after five years or so as in effect the two brothers will realise twice today's value, once from the rental income (repaying the loan) and once from the final sale
 

62tucker

Regular member
Site Supporter
Joined
Jan 30, 2010
Messages
14,295
Sorry. 2 flats. A terraced house. 3 bed upstairs. 2 bed downstairs. Rents around the area are £350 to £400 Heard to many nightmares of people renting out properties. If it was that easy and rewarding everybody would do it.
We had people in to see about
Doing up ourselves and selling
Doing up and renting
Just selling
The rules on renting out now and in near future are crazy. There not be many small renters soon. Just big companies.
I couldn’t cope with the hassle of it.
 

Dave

Red Leader
Staff member
Site Supporter
Joined
Aug 8, 2001
Messages
65,270
I thought you wrote 'houses' ?

And the reason why the Asians are the ones who are most interested is because it is easy and rewarding if you are prepared to put the effort in :)
 

62tucker

Regular member
Site Supporter
Joined
Jan 30, 2010
Messages
14,295
In fact. My dads downstairs flat was empty for 10 years after his last tenant had it and left leaving debt and owing money and mam and dad had loads of stressful times so never rented it out again. It basically became his storage area and joiners shop for messing around. He became a hoarder of anything but loved it. . Lost a lot of money in rent but money wouldn’t of help with their health and stresses.
 

62tucker

Regular member
Site Supporter
Joined
Jan 30, 2010
Messages
14,295
Also we couldn’t sell or do anything for a year as downstairs was getting flooded out from a leak from next door flat which because that’s rented out and the owner just wouldn’t respond to letters even off the water board and after a year they eventually had to break in with a court order sort of thing to repair to pipe. Long process as the water feed was to a joint property and as kids lived in one they can’t just turn if off. So leave it on and just flood next door flats. Some laws ?. And only took 2 hrs to fix. Leaking lead pipe next to foundation wall due to no hopper head on drain pipe and bath,washer water etc just going into yard. You want to see how some people live ?‍♂️ And see how some people don’t give a rubbish about other people property. Basically had a small flow of water along a groove we made in bathroom floor and through a hole we made in wall. So all walls are damp. And wood is rotting.
Rant over.
 

62tucker

Regular member
Site Supporter
Joined
Jan 30, 2010
Messages
14,295
I thought you wrote 'houses' ?

And the reason why the Asians are the ones who are most interested is because it is easy and rewarding if you are prepared to put the effort in :)
Just retired so got no desire to put any effort in doing them up and renting them out. To much stress and I be a long time dead.
If we do get £110 as they are so to speak.
Fully refurbished go for 60/70 for 3 bedroom
 
Top