An expert is advising anyone wanting to refurbish a property for investment purposes to budget an average of £86,276.
And that’s on top of purchase costs, stamp duty and transaction fees to conveyancers, surveyors and others.
Jonathan Samuels, chief executive of specialist lender Octane Capital, says refurb projects may offer the prospect of strong returns, they require careful planning and often substantial funding.
He has analysed average UK refurbishment costs and typical refurbishment finance costs based on a 12-month project timeline, as well as the required contingency budget.
Octane says the number of unmodernised properties available across England has fallen by -17.1% over the last year, with the average refurbishment project now costing £76,690.
Because such projects rarely proceed exactly as planned because of hidden structural issues, outdated plumbing and electrics, damp, energy efficiency upgrades, and unforeseen repair works, it recommends an additional £9,586 contingency.
That takes the total to £86,276.
Even that may not be the end of the bills, depending on how the project is funded.
Based on Octane Capital’s refurbishment finance example, interest and associated costs over a typical 12-month project amount to £15,886.
These costs include interest, arrangement fees, valuation fees, legal fees, exit fees and inspection costs.
This article is taken from Landlord Today