Beware Of The House Price Ceiling

Beware Of The House Price Ceiling

We bought our first house to renovate in April 2014 for £90,000, we were actually already halfway through the renovation when the sale went through, we just couldn’t get a mortgage on the house until certain structural jobs had been completed – see my post on this here.

Ben thinking about floor joists

Builder Boi….photo taken before we owned the house!

We had always intended to sell the house relatively quickly so that we could invest any profit in another renovation project. In August 2015 we completed the sale of our first renovation property for £171,500, an increase in value of £81,500.

Whilst we were budget conscious when we were renovating the property, as we wanted to make a profit,  it was our first house so I loved choosing and designing all the elements of the house and putting my ‘personal touch / taste’ on things.

It wasn’t the biggest kitchen – but I loved the tiles!

I was a little sad when it came to the day I had to hand the keys to the estate agent as we had put so much love and tears (literally) into renovating the house. I had one last walk around the house and took some photos before handing the keys back.

As we had not moved that far away we drove past the old house pretty much everyday. Within the first week after selling we noticed that work was being carried out on the house as we saw building materials being carried into the house. In addition, the new owners sold my beloved range on preloved – theres a separate post about that here. It therefore left me very intrigued what changes they were making to the house.

In the spring of 2016 we noticed that a for sale sign had gone up on the house so we eagerly logged onto rightmove and had a nosey at the photos and our mouths dropped when we realised they had put a new kitchen and bathroom in, and had given the garden a makeover. It was on the market for ‘offers over £180,000’.

My feature blue wall was also painted over…

To be fair, their new kitchen and bathroom did look nicer than when we sold the house, however we spent no more than £1,000 on our kitchen renovation (I hand painted a secondhand solid wood kitchen and Ben fitted the cupboards/worktops and tiled), and we spent no more than £1,500 on our bathroom.




They had a new kitchen and bathroom professionally done (by the looks of it) which I imagine would have cost at least £10k (for both). Plus they spent money on the garden, repainted some of the internal walls and installed built in wardrobes.

The house sold in October 2016 for £180,000, only £8,500 more than they bought the house for, meaning they would have made a loss once you take into the additional renovations and solicitors/estate agent costs. I am not sure what their intentions were when they first bought the house – perhaps they bought it as a home to live in for a while (and didn’t really care about ‘profit’), however for whatever reason they decided to move after a short period.

When we have been renovating houses we have always been told to keep in mind the ‘house price ceiling’ and this really shows that a ceiling does exist. When you are renovating a property for a profit you have to keep in mind the area the property is located, together with its size (number of bedrooms) and amenities (off road parking / garden).

If you want to invest in property there are some good property investment books available on Amazon that will give you an idea of what to look for when searching for a property and what to do/what not to do.

Happy investing & renovating!

*Featured image by 401calculator.org

Comments

  1. Your house looks beautiful.

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