First was a terraced house. Renovated and rented out.
Second is another house. Major renovations, new driveway( By prof) cut 6 trees in the garden, new grass, new plaster (By professionals),new flooring and few other things. I just did the medium complexity DIY's.
Anyway I'm thinking of buying another residential and adding a bedroom or 2.
However instead I want to step up.
Was wondering if somebody stepped up from renovations to say something like buy a plot of land and build. or Buy a property and convert into flats and saw it as better returns?
or what would one recommend as a challenge?
Hello and welcome to the forum
Are you looking at flipping properties or retaining them for rental income?
If it's the first, I would suggest a couple of ideas to scale up your income... you are obviously happy to manage other tradesmen, so could you work on 2 projects at the same time? Keep the projects the same size as those you've already done (as you've had great success with this strategy so far),but double your income over the same time frame? If you don't have enough cash to do this, now that you have a proven track record could you offer an investment / JV opportunity to friends and family? For example, offering an investor a 10% return on their cash investment would still give you a good profit on a second project.
If you want to add value to maximise returns, the priority there is research. All houses have a ceiling value which you must bear in mind. If you were considering converting a 2 bed to a 3 bed on a particular street, use Rightmove to look at SOLD houseprices within the last 4 months for equivalent houses within the immediate area, to check what prices are actually being achieved. This gives you a realistic idea of whether it would make financial sense to add additional bedrooms (and how many).
If looking at going into a loft, or converting a house into flats, look at what else has been done already down the same street (which will give a strong indication about whether planning permission might be granted). Then again, compare 'sold' house prices for the developed property/properties against your development costs. Don't forget to take into account any potential delays that planning can cause, and make sure you have an exit strategy. Eg. if you struggle to sell... would rental income be enough to cover any finance / mortgage costs you are committed to?
If you're looking at rental income, have you considered an HMO?
@Tracey Woods HMO is our resident HMO expert here on the forum and i'm sure will add in some helpful pointers here. But for example, the layout of some 3 bed houses work well for conversting to a 5 bed HMO which gives you a far stronger monthly rental income. The location of an HMO is vital to it's success though, and they can be more hassle to manage (you might want to use a Management Service to help you tenant the property).
Do keep up updated on your journey and how you get on!
