Do you fancy yourself as a property developer? If you would love nothing more than to rise to the challenge of converting an existing building, there is a lot to think about to be sure you will succeed in your ambition – far more than simply when to hire the builders.
However, by carefully researching your project, you could make a profitable move that pays off both financially and emotionally. For a few tips on getting started, read our guide.
What type of property developer are you?
This is the very first question you should ask yourself, as the answer won’t be the same for everyone. The first option is to start purchasing property with the intent to renovate it and sell it for a higher price. This can be done by carefully researching places you think have the potential to offer a high return on investment, then scouting out a suitable house or other building that needs some care and attention. More.
Another type of property developer is someone who not only purchases a property that requires refurbishment with the intent of selling it on at a higher price, but also transforms its original use. For example, you could buy a terraced house with three bedrooms and two reception rooms at auction and convert it into a four-bedroom property suitable for renting to students.
Finally, you can convert a house with the sole intention of making it your dream place to live. This is the area we will focus on in this guide.
Establish a budget
If you dream of owning a five-bedroom house with a large garden in the heart of your favourite part of town but simply do not have the finances to fund this, property development can be the ideal option. Across the UK, some houses have fallen into disrepair, perhaps because the previous resident was not interested in updating them or because they have sat empty for a prolonged period. Often, buyers do not want to take on the hassle of renovating a house like this, and because demand is lower, this type of home can present a great opportunity for would-be developers. More.
However, before you get carried away, keep a few things in mind. While you might be able to afford a larger place or one in a better location than your budget allows, you will need to factor in the cost of all the work required to make it habitable. Don’t buy at the top end of your budget if it leaves you with no cash for improvements. If you are relying on a mortgage to finance your project, this is particularly important.
Location, location, location
This is probably the motto of every property developer, but it does not mean only looking in the most popular parts of town, as you could fork out a lot here, even for a dilapidated house. Instead, research the wider area and predict which places could see prices rise over the next few years.
Proximity to schools, shops and transport connections all make a place more attractive to buyers. Remember, as prices in one place rise, buyers will start to extend their searches to the surrounding area, helping to boost values here too.
Let your head lead
It’s so easy to become emotional when choosing a new home and let your heart rule your head, but this is not always the wisest choice. For instance, you could dismiss a house that looks dated, has peeling wallpaper and an overgrown garden, when hiring people for painter and decorator jobs, along with a landscape gardener, could whip it into shape for a relatively low price.
When you find somewhere you love, invite London tradesmen, including a builder, surveyors, plumber and electrician, over to check the property out. More. They will be able to give you a realistic estimate on how much work needs doing and what this will cost – and they’ll most likely spot problems that you aren’t able to.
Follow the rules
There are so many rules and regulations to be aware of when it comes to property development, from basic planning permission to restrictions on developing listed buildings. Make sure you’re aware of these and how they affect your chosen house before you buy it, or you could risk disappointment. For instance, there is no point building a large upstairs extension and hiring a local bathroom specialist in order to create your dream washroom if you’ll have to rip it down later.
Be patient
Perhaps the most important rule of all is to be patient. Developing a house takes far longer than just buying one that’s ready to move into – but the results are well worth it!
