If you're like most people you've sat watching the various property shows on TV and thought: "I can do that".
With a new series of Grand Designs launching on Channel 4 recently; Relocation continuing with Kirstie Allsopp and Phil Spencer, and the usual BBC daytime shows, there's certainly plenty of inspiration around.
But have you ever thought through the process of property development and what it actually entails?
It's not an easy process. Often these TV shows take months, sometimes years of work, and edit them down to a single hour's entertainment (45 minutes if you count the ad breaks).
And there always seems to be a happy ending where the house is finished and the couples who have just moved into property development seem to make a profit.
Can it really be that easy? Well the first step to a successful property development is to understand the process. We've broken it down into a series of simple steps, so you can assess how easy you think you'll find buying a house and doing it up, whether it's to live in, or as an investment property.
The first thing to do is to work out how feasible the project is. This is typically a research phase, and requires you to see if there are suitable properties available in the area you want to invest in, and what the opportunities are.
For example, in your target area are there plenty of properties that haven't been updated for a few decades? Or is it full of estates built in the last few years? Successful property development is about taking a house and adding value to it to boost the price. If the house doesn't need anything doing, there's little opportunity for you.
Ask local estate agents what they have on their books. Tell them you are looking for a property development project. And don't forget to look into sales from local property auctioneers.
Once you have found a series of suitable properties make a shortlist and compare the options open to you. Take time to tour properties properly; find out as many details as you can. The more information you have about your potential properties, the easier you will find it to make a decision.
When you have picked a house, the next step is to get a full survey done on it and then buy it. Often people starting a new project such as this have to find funding from somewhere, such as a new loan or extended mortgage. As with all property purchases ensure you have this in place before you start looking (or you will just frustrate yourself and sellers).
And then when you've got your hands on the keys, it's time to start planning and designing the house. What you do will depend on your end goal. If you are looking to build your dream family home, then you will spend a lot of time getting every small detail correct. Whereas if you are doing this property development as an investment, you should spend your time focusing on creating a house that will have huge appeal to potential buyers. Don't sweat every small detail; do spend time ensuring quality is high.
When the planning it done it's time to get building. Your choices here are to do it yourself or GSI - Get Someone In. Often property developers start out intending to do the bulk of the work themselves, but soon find it can be more cost effective to hire experts as needed. If it takes you three days to plaster a wall that an expert can do in a morning, would that get your property development project finished more quickly?
Because you won't be able to sell it until it's finished. If done properly your house should have huge appeal to your target market. A recently renovated property with no chain should attract buyers quickly. To ensure you get it right, it can be a good idea to get your estate agent involved in the planning stage. They know what kind of buyers are in the market and can advise accordingly.
Finally, when the builders have gone and the cash is in the bank, do a review of the project and work out what you would do differently next time. This is an essential step that shouldn't be skipped. If you are going to have a career buying houses and doing them up, you will need to learn from every hard lesson.
Source: Article Base, Black Rock Estate, Shore Development
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