BRRR (Buy, Refurbish, Refinance, Rent) is a popular way to build a property portfolio in the UK, but your results will depend a lot on how well you carry out each step.
To succeed, you need to understand each stage and know all the real costs involved.
This guide walks you through each of the 4 steps, shows the real costs once all fees and contingencies are included, and highlights where overseas investors often run into problems.
What does BRRR mean in property?
BRRR is about buying a property that needs work, fixing it up to increase its value, refinancing based on the new value, and then renting it out.
The goal is to get most of your original money back so you can use it for your next purchase, instead of tying it up in one property.
This strategy works best when a property is cheap because it needs updating, not because of its location. Look for places with old kitchens or bathrooms, worn-out decor, or awkward layouts. Try to avoid properties with structural issues, short leases, or in areas where it is hard to find tenants.
Your improvements must convince a surveyor of the new value, and the rent must meet your lender's requirements.
How does BRRR work, step by step?
The BRRR process has 4 stages, and each one prepares you for the next:
- Buy: Look for a property priced below its potential, often because it needs updating or repairs.
- Refurbish: Focus on upgrades that add the most value for the lowest cost, such as new kitchens or bathrooms, rewiring, fixing damp, adding insulation, or turning unused space into something useful.
- Refinance: After the work, a lender revalues the property and may offer a buy-to-let mortgage based on its new value. This pays off your original loan and can return some of your cash.
- Rent: Find tenants for the property. The rent should more than cover your mortgage, and lenders will check this before approving your loan, so do the math before you buy. See our guide to the interest coverage ratio.
Most of your profit or loss is decided when you buy the property. The other steps help protect or increase that margin.
To get your numbers right, work backwards: estimate what a realistic refinance will return, subtract all costs and a contingency, and only then set your maximum purchase price. Always confirm your exit lender's criteria, including any minimum ownership period, before you commit.
Why do investors like BRRR?
There are 3 reasons that draw investors to BRRR:
- Capital recycling: Instead of leaving your deposit tied up for years, BRRR lets you recover most of it within months, so you can use the same funds to grow your portfolio faster.
- Creating value on your own: Rather than passively waiting for the market to rise, you add value through refurbishment on your own schedule. Newly improved properties also tend to attract better tenants and need fewer repairs early on.
- Access to properties others cannot buy: Properties that fail a mortgage valuation attract far fewer bidders. With short-term finance behind you, you compete against cash buyers, not the whole market.
However, BRRR comes with less certainty than buying a finished rental.
Finished rentals offer fixed costs and known rents. With BRRR, you are working with estimates and unconfirmed lending until the deal is done.
What does a BRRR deal look like in numbers?
Most BRRR examples show only the purchase price and refurbishment budget, which can make the numbers look better than they are. Here, we include the full cost:
In this example, you invest £201,750 and refinance £172,500, leaving £29,250 of your own money in the property. If you only count the purchase and works, as many guides do, it appears that just £16,500 is left in, but that figure leaves out stamp duty, fees, contingency, and bridging costs.
By comparison, buying a finished £230,000 property with a 25% deposit plus costs would tie up around £70,000.
BRRR still comes out ahead, though not by as much as it might seem at first. But look at what the short-term finance bought.
In this case, £175,000 spent on purchase and refurbishment turned into a £230,000 property, creating about £55,000 of value. The bridging cost was around £9,000, roughly a sixth of the value created. When you judge short-term finance by the return it enables, not just the interest rate, it looks very different.
Can you use BRRR if you live outside the UK?
Yes, overseas investors complete BRRR deals in England every year. However, the process is not the same as it is for a UK resident.
The Buy and Refurbish parts are usually straightforward, as short-term lenders focus on the property and exit plan, not your UK salary or where you are paid.
The Refinance part is harder. Most high street banks will not lend to non-residents, so you need a specialist lender, often at higher rates and with more paperwork. Lenders may reduce foreign income and can change criteria quickly. Our guide to refinancing a UK property as a non-resident covers the process, documents and costs.
Before committing to a deal, confirm whether a lender is likely to refinance you and on what terms. Indicative terms in writing are far more reliable than verbal reassurance.
What mistakes should overseas investors avoid?
Most expensive BRRR mistakes fall into 3 main categories:
- Assuming you can exit the deal without confirming it
- Relying on hoped-for valuations rather than solid evidence
- Underestimating costs
Overseas investors also face a fourth common pitfall. Here are the 4 mistakes that catch overseas investors most often:
Mistake 1: Treating the refinance as a formality
This is the most common and expensive mistake for non-residents. The BRRR strategy relies on finding a lender who will refinance you, which is never guaranteed if you live overseas.
Bridging loans are usually used for the Buy and Refurbish stages. They are quick, based on the property, and flexible. Choose a longer loan term than the shortest option, and check for an early repayment penalty. If there is none, finishing early will not cost you anything, so do not risk cutting it too close.
Always talk to a broker who understands non-residents and confirm realistic refinance terms before you commit.
Mistake 2: Building the deal on an optimistic valuation
Every BRRR deal depends on a number that is not certain yet: what the property will be worth after the work is done. If the surveyor values it lower than you hoped, you will borrow less and have to leave more of your own money in. This is called a down valuation, and it is the most common reason BRRR deals do not meet expectations.
So back up your estimate with recent sale prices for similar finished properties nearby, then run your numbers again using a value that is 10% lower.
Mistake 3: Budgeting for the works but not for everything else
Refurbishment costs run over. Old properties hide problems, prices move, and work takes longer than scheduled. From another country, you cannot walk the site or spot a job going wrong early, and planning permission, Building Regulations sign-off and insurance all need someone on the ground.
Overseas buyers also face extra costs that UK investors do not: a 2% stamp duty surcharge on top of the 5% additional property surcharge, plus currency conversion fees both ways.
All these costs come from the same budget. So add a contingency of at least 10 to 15%, agree on the scope and price in writing before work begins, and have someone you trust check the work.
Mistake 4: Choosing the ownership structure after you have bought
Whether you buy personally or through a UK limited company affects your taxes, which lenders will consider you, and how easy it is to add more properties later. If you change your mind, you will have to sell to your own company and pay stamp duty twice.
Many overseas investors with several properties use a company structure. A UK company pays corporation tax on its profits, and how that works with your local tax depends on the treaty between the two countries, so get advice in both places. Our comparison of limited company versus personal buy-to-let covers the UK side. Decide before you make an offer.
As a rule of thumb, work backwards. Start with what a lender will refinance, subtract the cost of the work plus a contingency, and only then decide what you can pay.
Is BRRR right for you?
BRRR works best for a certain type of investor, so be honest with yourself before you commit your money.
It tends to work if you can fund a purchase without a mortgage, have a builder you trust, can afford to leave money in when the valuation disappoints, and are building a portfolio rather than buying one property.
It is less likely to work if you need your money back by a certain date, do not have anyone on the ground in the UK, or the deal only works at the best-case valuation.
For overseas investors, one thing matters most: you need a refinance route you have already checked, in a structure and currency a lender will accept. Most BRRR problems can be fixed with time or money, but if no one will refinance you, there is no solution.
Funding the Buy and the Refurbish steps with GoGoProp
Before you can refinance, you need money for the purchase and works. You can use your own cash, bring in a partner, take a private loan, or use short-term finance secured on the property.
For many BRRR investors, bridging finance is the practical option. It helps you buy and refurbish before a buy-to-let mortgage is available.
GoGoProp lends bridging loans to overseas investors buying residential buy-to-let property in England, including refurbishment cases. Terms are 1% per month, with a 2% handling fee, up to 75% LTV, over 3, 6, 9 or 12 months, with no early repayment penalty.
Planning a BRRR project? Get your costs in writing before you commit.
GoGoProp lends under Money Lending Licence No. 1341/2025.
Key takeaways
- BRRR stands for Buy, Refurbish, Refinance, Rent. The aim is to recycle your cash into your next property.
- Buying and refurbishing rely on the property and the work; refinancing depends on lender approval.
- Always count every cost. Fees, stamp duty, contingency, and interest can nearly double the money you leave in.
- A down valuation is common in BRRR. Even a 10% drop can tie up much more cash than planned.
- Non-residents face extra hurdles: fewer lenders, higher rates, and reduced credit for foreign income.
- Get your refinance terms in writing before you buy.
- Bridging loans are used for speed and access, not just as a last resort.
Frequently asked questions
How much money do you need for a BRRR deal?
Enough for the purchase, the refurbishment, stamp duty, fees, a contingency and the interest on your short-term finance. On a £150,000 purchase with £25,000 of works, budget around £201,750 in total, and expect roughly £29,250 to stay in the property.
What are the disadvantages of BRRR?
The main risks are a lower-than-expected valuation, refurbishment costs running over, and a refused or delayed refinance. Each one increases the money you leave in the deal. Non-residents also face a smaller pool of refinance lenders.
What is the 70% rule?
It is a guideline suggesting you pay no more than 70% of a property's after-works value, minus refurbishment costs. It originated in the United States. Treat it as a rough filter for UK deals rather than a rule, because costs differ here.
Is BRRR better than flipping a property?
They serve different goals. Flipping sells the property and returns your profit quickly. BRRR keeps the property, so you gain rental income and long-term growth, though your capital comes back more slowly and only if the refinance succeeds.
Do you need a UK company to do BRRR?
No, but many overseas investors buying several properties use a UK limited company for tax and lending reasons. Decide before you buy, because moving a property into a company later means paying stamp duty for a second time.
