Buy Refurbish Refinance (BRR) Explained

Buy Refurbish Refinance (BRR) Explained

If you are looking to build a portfolio of properties, the Buy, Refurbish, Refinance (BRR) strategy can work well, because you can expand your property portfolio while also recouping your initial investments.

How does the Buy, Refurbish, Refinance strategy work?

In simple terms, the Buy, Refurbish, Refinance strategy involves buying a property at a good price, adding value to that property through improvements and/or refurbishments, and then refinancing that property to re-extract the cash you put in.

You can then rent out the refurbished property to gain some steady income, and then repeat the process all over with a new property.

For example, you could buy a property valued at £70,000 by negotiating a mortgage for 75% of the cost (£52,500). You would then need to invest the remaining 25% of the value (£17,500) as a deposit, in addition to legal fees for the purchase (£5000), and the cost of the improvements you want to make (£7,500). This would bring your total investment to £30,000.

Once the improvements have been made, you can have your property revalued which, in this example, puts the property value at approximately £120,000. You then renegotiate the mortgage based on this value and, assuming another 75% LTV is approved, this means you will be given a £90,000 mortgage. 

Once you have repaid the original mortgage of £52,500, you will be left with £37,500, which recovers your initial investment, plus a profit of £7,500 which you can put towards investing in another property, while also receiving rental income from the renovated property.

The BRR strategy works well when combined with a buy-to-let, but it isn’t a specific buy-to-let strategy and can be used with other property strategies such as HMOs and commercial properties.

Which properties are best for BRR?

The Buy, Refurbish, Refinance strategy works on the principle that you find a property that you can add value to, not one that is ready to rent out while still being valued at the price you paid for it. You also need to be realistic in terms of a property’s potential so that you don’t end up spending more time and money than you can recoup.

It is worth looking for properties that you can get at a discounted rate in the first place, such as one that is already in need of work just to be worth its original valuation. This way, once you have made the improvements, you should be able to get even more money back when you refinance the property.

Improvements you can make

Value can often be added to a property with just a few minor improvements, which is where BRR works well – you don’t have to invest a huge amount of money to turn a profit.

Putting in a new kitchen or bathroom can help to boost a property’s value, but even new carpets or flooring, new windows, or a fresh coat of paint can be enough to make your investment a profitable one.

If you do have money to invest, and you are confident you will be able to recoup your investment, you may consider an extension or adding an extra bedroom, as the number of bedrooms is often how property value is calculated in the UK.

Another way you could potentially increase the value of a property is by title splitting, such as by turning a house into flats. This way, you can rent out each room for a potentially higher total price than you could rent the entire property to one family.

Factors to consider before using the Buy, Refurbish, Refinance strategy

Before you start to purchase properties with the Buy, Refurbish, Refinance strategy in mind, you’ll want to negotiate a good mortgage with the lender to ensure that BRR is worth it. A specialist mortgage broker can help you secure good rates for this.

It’s also important to understand the local market where you are going to buy the property to ensure that you get a return on your investment, as you could also struggle to refinance a property that you have refurbished through no fault of your own if the house prices begin to drop.

In some areas, no matter how much you improve the property, its value will probably have an upper limit based on the area it is located. For example, if you buy a property for £80,000 (including purchase fees) that needs work, but no property in the area is worth more than £100,000, it won’t be worth it financially to invest more than £20,000 in making improvements.


BRR is a great strategy for those who are looking to expand their property portfolio, but the key to success is understanding the local market thoroughly and securing the best possible mortgage rates for your purchases.

If you are looking for a mortgage broker to find the best mortgage rates available to you for your BRR property purchase, please get in touch.