New house or Old

[Liz]

Where is the most profit to be made, buying a brand new house with no work required or getting an old one that has had some work done but not for 16 years and now needs redoing.

The new one is a mid terrace town house with 3 large bedrooms and 2 bathrooms, garden and 2 parking places at £200,000.

The older one 1930's semi requiring about £40,000 of work doing, no garage but space for one. Very large garden. Cost at moment is £240,000. Both in good areas.

What will make the most the profit I cannot decide.

Any advice appreciated.

[Webmaster]

Hi Liz

A year ago I would have said that both houses would be a great investment, with the house prices booming you couldn't fail to lose out. However it is probably worth being a little more wary now, yes we are bombarded with TV shows showing how people make fortunes on their houses after doing them up, but quite often those shows forget to mention how the housing market would have pushed the prices up anyway

Also don't underestimate the amount of time and effort required to do around £40,000 worth of work. Even if you are getting contractors in there will be a lot of stress and hassle associated with managing them, and you may well find that your work/leisure time balance gets completely messed up.

[balvert]

I think estate agents have caught on to this- a two/three bed Victorian terrace house in Greenwich, listed as a renovation project by the estate agents, is often still well over £300,000- when similar houses in mint condition go for maybe £380,000- £400,000.  Sounds like a lot of profit, sure, but if you can't do the work yourself there isn't much scope really.  Gone are the days when you could double the value just by painting everything magnolia!