BRR is a common property investment strategy. An investor buys a a low-value or below market value property and refurbishes it to increase its value. The refurbishment may also include extending the property and converting it to an HMO to increase the yield.
The investor later refinances at the property’s higher value, and rents it out to obtain an income from the investment. During the refinancing, the investor may withdraw some or all of the original deposit.
When the investor withdraws the full deposit as part of the refinancing, this is called an all money out deal.
Depending on the scope of the refurbishment, the investor may require a specialist form of lending, eg a bridging loan or a buy to let refurbishment mortgage. This is a complex area and requires specialist advice.
Also referred to as buy, refurbish, rent, refinance (BRRR), which emphasises the role of the rental income in the refinance.
