This month’s YPN House
The property – 189 Canklow
Jesse Fossey Taylor takes us through one of his latest refurbishment projects.
This is a 3-bed, red brick and tile semi-detached house in Rotherham, sourced via an estate agent. It was a corporate sale – a repossession being sold by the mortgagor. When it first came on the market, we (i.e. my company) was one of the first to view, but there was a hot bidding war and the house was snapped up quickly at a much higher price than we offered.
However, the sale fell through because the buyer wasn’t proceeding fast enough, and the corporate seller got fed up with waiting. The agent, with whom we have a great relationship, came back to us as he knew we’d be able to get it all done and dusted quickly. I find this happens quite a lot with repossessions – we rarely buy straight away, but often pick them up after a higher bidder fails to go through with the purchase.
Purchase price: £51,000
Offer agreed with previous buyer: ca £60,000
Date of completion: 19/12/19
I’d describe this house as a standard, utility-style property, probably post-WW2 construction, the type that you see up and down the country. However, the property is in poor condition inside and out, nothing serious but in need of a full renovation.
£51,000 is a really good price, as we know people would have been prepared to pay £60,000-£65,000 for it even in this poor condition.
Never attend a property viewing without these documents!
I know most of you don’t conduct viewings like this and that means you’re wasting at least half of your effort! We’re giving away our tried and tested viewing tools to our subscribers plus a video of Jesse showing you how to use it.
We’ll also let you know when we post the next installment of the refurb story.
The property refurb plan and costs
Our plan for the property is to refurbish to add value then rent it out to a working family. I anticipate the rent being in the region of £525-£575 pm.
We’ll do what I call a “bog standard strip out and refit”, which means everything except the roof, so new windows, kitchen, bathroom, boiler, flooring, re-wiring and decoration.
Anticipated value after works: £85,000-£95,000
Renovation estimate: £21,639
Work started in January, and I’ll talk through the details and cost of works in the next installment – and also let you know if we come across anything unexpected. But on that note…
Drama at the property!
The Christmas lull meant there was a quiet period before we started work. Then when our builder turned up in January, he found there had been a small fire at the house. No one had told me or anyone else anything about it, so this was a complete surprise.
Both police and fire brigade had been called, and it turns out that either the previous owner or tenant had – allegedly – revisited the house and tried to destroy the electricity meter, presumably because of some debt. They were rather brutal and attacked it with a hammer and goodness knows what, then left it popping and fizzing away with sparks flying out of it, which set the box on the side of the wall ablaze.
It was only when the builder called to say, “I’m sure there was an electricity meter there before”, and I checked back on our photos to make sure that there definitely had been, that we found out about it. I called the electricity company to get the supply turned back on and it was them who told me there had been a fire. I can’t believe that no one had bothered to call the owner of the property – i.e., me! But there we are – in this game you have to accept that unexpected problems will crop up and I learned long ago to accept such things as being all in a day’s work.
YPN House - Part 2: Coronavirus halts work
Get the builders in
The builders were the ones who had initially alerted me to the fire (not the police or the fire brigade …). It took five phone calls to my electricity supplier and the national grid, and it was only after being transferred to several departments that someone came around to have a look at it.
He said there was a problem and we had to pay for a survey by the National Grid. Sorting this issue cost £1,355 because I needed a new cable and they had to dig up the garden back to the road. It was connected to power on the 16th of April.
Meanwhile, the builders bought a generator to carry on with the works. We estimated that the builder-supplied materials would cost around £2,000 (for us that excludes the big ticket items like kitchen, bathroom suite and tiles because we specify and supply those and we know the costs). The rest of the money was spent on labour. Different builders will give different prices, and it’s key to get as many quotes as possible. It’s not about getting the cheapest, but the best fit for you and your project.
I’m always careful when doing a renovation to get the initial list of works (see Schedule of Works shown in this article) just right to make the house decent, safe, rentable and desirable. It’s possible to spend too much money on the project, which will kill the deal. I then give this list to our potential builders to get like-for-like quotes.
We set aside £3,000 for a contingency fund, and that will usually be spent on electrics, plumbing, boilers and anything lurking under the floorboards. I have a works manager who signs off on any unforeseen works, and I make sure there is photographic evidence so I can record everything that was done.
Plan of action
As mentioned in last month’s article, we estimated £21,639 for the renovation of Canklow. That number includes the cost of a new kitchen and bathroom, a partial rewiring, re-plastering, redecorating and new flooring. We needed to dig into our contingency a little bit for the boiler, as we had an allowance of £750 but the new one cost £1,500.
I used to be focused on getting the job done as fast as possible to get it rented out as soon as possible. But I now focus on getting the job 100% right before a tenant moves in. Property is a long-term investment and I hope that this house will be in my family for the next 300 years … I’ll pass it on to my kids, who’ll pass it on to their kids, and so on. Looking at the bigger picture, an extra few weeks won’t make much of a difference.
In the past, I moved in tenants when the paint was still wet and the snagging wasn’t finished yet. Once, the water tank burst on move-in day and flooded the entire place. It’s just stress I don’t need! That’s why I like to get it completely finished, do the snagging checks and give the builders an additional week to finish anything that needs finishing. At that time, the heating is on full and the water is running. If anything is going to leak, burst or break, it can be fixed in that spare week.
When the pandemic hit
We were around 80% of the way through the works before lockdown was enforced and we had to put tools down. If we weren’t in this situation, we would have been finished and rented by now.
I’m not entirely sure on what to do with the building works at the moment. Something we’re considering is splitting the works and jobs for teams of two to complete, and phase it out just to get to the end. There are a few bits of materials we’re still waiting for, but if we can keep inching forward with teams of two on the jobs that can be done, we can slowly get it finished, snagged and marketed.
However, if we weren’t so close to the finish line, I would probably mothball it until everything is back to normal. I think that would be the most sensible thing to do. There was a point where I was organising meetings to constantly keep the ball rolling, but as soon as we made a decision, everything had changed again.
The situation is changing all the time and I’ve accepted it and stopped stressing about it. That’s all I can do at the moment. I’ll check back in with you next month to keep you updated on where we are with 189 Canklow!