Taking back control of timing


Jonathan rubins alternative bridging

Timing is one of the most important aspects of a successful property refurbishment. Choose to sell in a heated market and a completed project could recoup a healthy margin but sell at the wrong time and it may seem like more work than it’s worth.

The trouble is timing is a very difficult thing to control. It’s unusual for a refurbishment project to run without any hold-ups at the best of times, but in the current environment, with so much demand for building contractors and the sourcing of materials presenting a logistical challenge, it’s much harder to predict at the outset when a completed property will be ready to market.

So, what options do property investors have to ensure that the success of their refurbishment doesn’t end up as a hostage to fortune?

One way of doing this is to ensure there are alternative options available when the property becomes ready to market.

So, for example, if the sales market is muted at the time, consider letting the property until there is an increase in purchaser demand.

Often, however, this entails refinancing onto a term loan at the end of the bridging finance, which brings its own costs and complications.

There is, however, a way that property investors can ensure they keep their options open at the completion of their project and take back control when they sell the property, without the need for refinancing.

Some lenders now offer bridging finance for refurbishment, with the option to extend or convert the facility onto a term loan once the property is ready to let out.

At Alternative Bridging, for example, we have launched a new range, which is available for light and heavy refurbishments on residential and commercial property.

The range features initial advance for purchase or refinance, further drawdowns to fund improvements, final advance on Practical Completion (PC) of the works, and reduced interest rate following PC.

There is also the option on non-regulated loans to extend or convert to a three- to five-year interest only term loan, meaning that investors are empowered to choose whether they sell a property or hold onto it, without having to refinance.

Timing is one of the most important aspects of a successful property refurbishment and with refurb products that can be converted onto a term loan, investors can take back control of that timing.