This is the story about a property, a Victorian townhouse, in a local village to where I live that I purchased prior to auction for a bit of a steal.
In brief, the hapless estate agent’s ludicrous guide was £100,000. I looked round the property the day after the auction notice went up and put in a bid 24 hours later. A little haggling resulted in a purchase price of £135,000. I was keen to do the place up and sell it on, but I ended up directly swapping it, in a very straight and efficient manner, for the cottage next door to my home, which I had coveted for nigh-on nine years. I appreciate that it’s a mortal sin to covet thy neighbour ’s ass, but the Old Testament, as far as I can recall, doesn’t say anything about the coveting of thy neighbour ’s adjoining cottage, so that’s alright then (I’ve never been particular fond of his ass in any case). This has elevated the value of my property significantly. All parties were pleased with the arrangement, and that’s what a good deal is all about, surely.
Unfortunately, I made an error in the process: I loaned my mercifully-erstwhile neighbour all my tame (and non-VAT registered – important that, mind) tradesman, relationships with whom I have carefully nurtured over the years, which rendered me, for the past few months, somewhat tradesman light. No regrets, though, because for all my help and assistance an agreement has been proffered in my direction, unsolicited I might add, whereby I also benefit from the profits of the exercise (come sale day, whenever that may be, as my ex-neighbour wants to enjoy living in it for a while), and the economics of the project look very healthy indeed, I have to say.
We (I say “we” because I have been somewhat involved in the renovation work, on a consultation basis only) have spent, give or take about ten bob, £50,000 on re-wiring, central heating, replacement sash windows, the knocking of downstairs rooms into one another to make airy and light spaces, roof repairs (considerable), floor sanding, chimney repairs, plastering, painting and decorating etc. We could have done the job for £31,000 (I estimated £29,000 prior to pitching) but when it came down to it we knew we were quids in and, therefore, could afford to splash out a little on better- quality improvements in the hope of achieving a premium sale price. For example, we could have chosen cheap-as-chips pressed steel radiators from the local builders merchants for about 50p a gross, but decided on renovated reclaimed ornate cast-iron affairs at £250 a pop, which look spectacular.
The kitchen could have been from Ikea and would have worn well and lasted for over … say, three and half weeks without being replaced, but we opted for hand-made kiln-dried oak units with granite work surfaces and German-manufactured appliances, all of which will probably still stand proud and gleaming amid the rubble come Armageddon. The ghastly 40’s fireplaces could have been simply ripped out and plastered over, but instead we installed original Victorian feature-pieces and, in other rooms, extraordinarily-expensive locally-made wood burning stoves. The feature full-length bay windows to the rear could have been bodged together, but we employed a skilled carpenter to renovate them to their original condition and now they’re better than new. I could go on. I will. A craftsman-made-to-measure magnificent one-up-on-the-Jones’s front door-to-die-for, rather than an off-the-shelf one-size-fits-all flimsy thing from the DIY shop constructed from spit, compressed sawdust and waste hamster bedding. Blacksmith-made door furniture and solid brass hinges. Attractive, enameled halogen light fittings on dimmer switches. It’s easy to do all this if you categorically know that you’re onto a winner and it’s only the degree of profit that concerns you. It’s also infinitely more stimulating a process and satisfying a result.
As I’ve mentioned elsewhere in this issue, most people don’t have good taste, but they know what good taste is, or is supposed to be, they aspire to it and will pay you handsomely for it because they don’t have the first clue how to achieve it for themselves. It doesn’t exist at Wickes or B&Q. Most homeowners wouldn’t know a salvage yard (sorry, ‘Architectural Antique Emporium’) from a knacker ’s yard and would consider a builder ’s merchants a place for … well, solely builders. Good taste for most people begins and ends with posh tottie Kirtie Allopp and all those BBC afternoon DIY shows, with their emphasis on MDF frippery, sack-cloth drapes, throws and speedily-achieved temporarily fashionable make-over paint jobs. But that’s not style; it’s just smoke and mirrors. Buyers easily see through the smoke, and the mirrors reflect an image that’s terribly passé. What you should be trying to achieve is an environment that is so drop- dead gorgeous your outrageous asking price appears most reasonable after just one viewing. Style, charm and attention to detail shine through so brightly that they can knock potential purchasers sideways.
Because it’s unusual and unexpected. Most developers, restorers and renovators simply don’t bother, or they don’t have a clue, or both. When tarting-up an old property for re-sale they’ll attend to the obvious concerns of structure and cosmetic but in a very ordinary way. And a cheap way, too. They try to maximize profits and increase their margin by shaving the bottom line (their costs) rather than attempting to increase the top line (the sale price). The middle market, the run-of-the-mill, isn’t where the real money is; it’s with the aspiring well-to-do who’ll go that extra yard when it comes to paying for your goods if it’s patently obvious that you’ve gone that extra yard in anticipating their needs.
I appreciate that this is easier to do if you’re confident of your market. We were confident with our recent property endeavour for two main reasons: firstly, we have a good instinct of local house prices and, through this knowledge, were convinced that we had severely underpaid, mainly because we were prepared to pay a whole lot more; secondly, I can’t now recollect just how many times passers-by knocked on the door of the property, whilst it was being renovated, and, in no uncertain terms, expressed how thoroughly annoyed they were that we had pipped them to the post by snapping up the property prior to auction. Naturally, we didn’t admit to how little we had paid, but on so many occasions callers said that they also had seen the For Sale notice go up and were eagerly anticipating the auction day. “I was going to bid X for it.” “I’d have paid XX, you know.” Indeed some seemed seriously annoyed that we hadn’t hung around like them, as if we had cheated in some way, hadn’t played by the rules, had struck some underhand arrangement, had been nefarious. It didn’t seem to matter that the sale notice had read “For Sale By Auction Unless Previously Sold,” as most auction advertisements read.
And so, the property is now complete, and resplendent. It certainly helped in choosing a characterful building in the first place that retained many original features. And we’ve had it valued. If you may recall, I predicted a sale price, once renovated, of £220,000, or thereabouts. We paid £135,000 and I guessed at spending in the region of £30,000 (which included stamp duty, solicitor ’s fees etc), a total outlay of £165,000 and, thus, an expected profit of £55,000. In the event, we spent £50,000 by going that extra yard and it’s now valued at … £260,000, a profit of £75,000 in little over four months. By spending an additional £20,000 over and above what was absolutely necessary and in so doing creating a really special property we’ve increased our profit by an additional £20,000. And how much more effort did it take? Hardly any. You have to spend the time choosing materials and dictating processes in any case. All we did was choose this material or process in favour of that material or process. Easily done and, as I’ve said, but it’s worth repeating, so much more rewarding, not just financially.