The Market Is Perfect for the Amateur Property Developer
With interest rates still low and property prices set to continue rising this year, it could be a good opportunity for first-time developers to make a profit. However, this still isn?t as simple as it was before the recession. You need to be careful about the projects you take on to minimise the risks.
Location Is Key
The location of a property will still come before any other aspect, so it?s important to spend time researching the area. Look for somewhere with excellent transport links, good schools and plenty of open spaces. Up and coming areas can be a good choice if you get it right, but it?s not worth taking too much of a risk with this.
Concentrate on the Mortgage
There are some good deals available for developers, but you need to make sure you get the best one possible to maximise your profits. The amount lenders are willing to release for renovation projects will depend on the state of the property. If it?s currently uninhabitable, you may only get a percentage upfront and the rest on completion or in stages. You should factor in this and all the other associated costs, including stamp duty, legal fees and estate agency costs, when compiling your budget.
Choose the Right Contractors
The quality of the build and getting it completed on time can make a big difference to the amount you make on a project. One of the most important elements for this is selecting the right contractor. If you?ve used one in the past or can get recommendations from family and friends, it can be helpful. Get a few quotes and make sure you take up their references. It?s best to have a fixed quote in case the work takes longer. Opt for companies that are members of a trade association.
You need to dress the property correctly to help you achieve the right price and a quick sale. Whether you?re furnishing small rooms or glass balconies, you shouldn?t make too much of a design statement. Neutral shades and good-quality fixtures and fittings are always the best option, as they appeal to a wider group of buyers and enable them to put their own mark on a property.
Property development should never be undertaken lightly. However, if you choose correctly, there is still money to be made from renovating and selling houses.