How to tell if a refurb deal stacks

Before you fall in love with a project, run it through the same four-step check every time: what it's worth done, what it costs to get there, what the finance adds, and what's left at the end. If it doesn't stack on paper, no amount of optimism fixes it.

1. Establish the end value (GDV)

Start with what the finished property is worth, not what you're paying. Pull recent sold prices for genuinely comparable homes — same street or area, same type and condition — and work in price per square metre. That gives you a defensible Gross Development Value (GDV) you can build everything else around.

2. Cost the works honestly

Price the refurbishment line by line rather than guessing a round number. Strip-out, rewire, plastering, kitchen, bathroom, flooring and decoration are the backbone; add a contingency (10% as standard, more for older or unknown-condition stock) because something always turns up once the carpets are off.

3. Add the cost of money and time

Bridging finance, arrangement fees and the months you hold the property all cost real money. A deal that looks fine ignoring finance can turn marginal once you add six months of bridging interest and the fees on the way in and out.

4. Check what's left at the exit

For a refinance (BRR), the question is how much cash you leave in and whether the rent covers the larger mortgage. For a flip, it's the profit and margin after selling costs and tax. Either way, decide your minimum acceptable outcome before you offer, and walk away from anything below it.

• Value first, costs second — never the other way round.
• Always include finance and holding costs.
• Keep a contingency you don't dip into lightly.
• Set your walk-away number in advance.

Related calculators

Guidance only. BrickCrunch provides general information, not financial, tax or legal advice. Always confirm figures and your own position before acting.