If you’re new to property development and are looking to make money by either selling or renting then you need to do some research especially in this economic climate.
Location, location, location as the TV show says is very important especially if this is your first property development. You need to have a good plan about the house market in the area you’re thinking of buying. Buying locally may be wise for a first time property developer as you must have a sensible idea of what areas are being developed and if there’s a need for rented accommodation in the area. If you are unsure of what’s happening in an area you will need to do some research. You could ask local real estate agents, read local papers and just generally ask people in the area. For instance if there’s a university in the city and you’re planning on renting out the development then find out where it is and check the properties in that area. Also observe local transport and facilities.
A great way to get ahead of everyone else is to understand where the up coming areas are in the town. Many towns have regeneration areas where lots of local government cash are being spent on. A helpful tip is to be wary of what real estate agents say. Keep in mind they will be wanting to make a sale therefore they might describe an area as up and coming when essentially that may not be the case. Ask them what sort of properties have sold recently and for how much.
Another helpful tip is to remember to keep your business head on and always follow your business plan. It’s terribly easy to fall in love with a property that isn’t going to get you the best return. Just because you like a property does not mean it will be the right property to develop to either sell or rent. You must have a list at hand with what you need from the property and stick with it. Once you have chosen the correct property you’re then going to need to find the right builder to do the development. This part might make or break your development thus it is vital to find the right building company.
Hiring a builder will only give you skilled workers, that suggests that you will be acting as your own contractor which means that you may have to prepare all the mandatory permits referring to the project. This can be fine if you have got the time to do the research necessary. You will also need to coordinate all aspects of the development which is fine for an experienced developer however not for a first timer. Coordinating the architect, designer, electrician plumber etc may be a daunting task if not done correctly. It is a little bit of a balancing act and shouldn’t be taken on lightly.
First time developers almost certainly ought to hire a contractor and let the consultants deal with all of the above. But like the property, you need to do a little bit of analysis to find the best one. Check on-line for building contractors and ask for references.
Like everything we do in life, preparation is the key to a successful project. The more time spent researching every aspect of your property development, the more likely your development will turn out well. At the end of the day you would like to make the most amount of profit, and you won’t do that if you jump in head first without looking at every detail.
Another great article by Aspen Woods Real Estate