My aim in blogging about my investments and plans is simply to try and help anyone who is thinking about investing to avoid the mistakes I am making. I think everyone should have a financial plan for the future and if one more person does after reading this part of my blog, then that would be brilliant.
While I have worked in digital marketing for almost 10 years, property is far newer to me and I'd appreciate any feedback on our plans. If you are interested in investing and haven't read my 'Wealth Creation Strategy - Stocks and Property' blog, it might be of interest.
Before I jump into this blog - I want to thank the team at Oversubscribed for helping me pull these blogs together and support with my social content creation. If you are interested in raising your profile online, head over to Oversubscribed.
Our plans to build a portfolio
With the help of a world class team, over the next 18 months and probably beyond, we plan to build a portfolio of properties following a similar strategy to our first. We have a reasonably aggressive purchase strategy for this year, but will continuously review as we learn more. Follow our journey on our Property Instagram page.
Our second property
We have just completed on our second property where we are following a similar strategy to our first. In the first blog, I go into more detail on the strategy. Over the next 8-10 weeks we will be renovating the property, before renting it out.
During the first property we came across a number of extra costs we didn't expect. I will outline these in a different blog, but have included them below.
The numbers in theory
The other numbers missing from this are the refinance legal costs that will be around £1,500 but will depend on the lender / solicitor.
Purchase condition photos
Head over to our property Instagram to see what work will be carried out.
Rip out photos:
Head over to our property Instagram to see what is being carried out next.
Costly Post Rip Out Issues Found
Before ripping out the property, we thought it would be a straightforward refurb. However once the rip out was complete, the team found some issues that weren’t visible beforehand. This seems to be a running theme with our properties and hopefully as we get more experienced, the team and I can spot these ahead of time.
During the rip out two issues were discovered.
Issue 1. No plasterboard was found 😲. Once the wallpaper was stripped off ready for a fresh skim of plaster, the team found no plasterboard and instead ply-board. Cost - This meant increased labour costs to remove the ply-board, fit fresh plasterboard and plaster skim on top. Total cost £1,131.22
Issue 2. Gas pipe. In the bedroom there was a strange gas pipe that had been planned to be moved under the flooring. This turned out not to be possible without far greater cost than planned.
Cost - A solution was found but an extra £280 had to be spent.
While it’s not ideal to find extra issues we hadn’t planned for, it should still work out to be a great property once done.
Refurb finished
The refurb has been complete and after being on the market for less than a week, it has been rented out.
Before and after pictures
FINAL NUMBERS after being rented:
Originally the plan and numbers (as per above) were based on the house being rented for £550 pcm. However when the agent came to list it, it was apparent that a higher rent was achievable. They put it on the market for £575 pcm and within less than a week rented it out.
ACTUAL vs PROJECTED NUMBERS
The final ROCE figure is 1.64% higher because of the increased rent achieved. However as you can see (highlighted red), the refurb came in slightly higher than expected. However, these figures do include refinance costs. As long as our maintenance and voids come in within the 10% budget set aside, then these should be the exact returns over time.
Head over to our property Instagram to see what work was carried out and see our latest project.
I hope this was useful and welcome any feedback. To learn more about me, check out my about page here. To see my latest project follow me on my social channels Instagram, LinkedIn, Facebook.
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