Buying a House as an investment HELP!?

Question

Ok, i am thinking about buying a house off a friend for an investment. The house is a 4 bedroom house, its quite big and needs the following, New windows and front door (roughly 8 windows), New carpet and tiles throughout, new kitchen and bathroom. Basically all the inside need revamping but stucturally its fine. Just want to know a ball park figure of how much it would cost to do it all to a resonable standard and any tips ect?

Any advice is appreciated.

Thanks

Jake

Answer 1

If you are 'in the trade', maybe £2000 for materials (fitting costs will be a few hundred assuming you do everything but the windows yourself)



If you are 'Joe Public' (and employ builders to do it all) maybe £20,000 ....

Answer 2

I assume you will be letting the property, rather than reselling? If so my advice would be to let it at just below market rent initially having brought it up to a good but basic standard. Make it clear to the new tenants that work will be ongoing and that the rent will be likely to rise accordingly (at 12 month intervals) to a projected figure.

That way you will have an income to help finance the improvements. Replacement and repair of existing items such as doors windows and decorations is all tax deductible expenses which can be set against rent received. The property would have to be let first to allow such expenses claims.

You can claim 10% wear and tear against furniture and carpets annually but not the initial outlay. Same with the bathroom. But overall, getting it up and running has got to ease the pain.

Lloyds Bank Tax Guide (WH Smith) is very useful for letting tax advice. The link will guide on letting property.

Answer 3

if it is planning to be an investment property have you researched the rental demand for four bedroom properties in the area?

it is a big house. who are you hoping to rent it to - a family, professional couple, students?

is the house near public transport, shops, schools, parks, medical centres, supermarkets, bars, cafes, etc.