Property development
includes building new homes or simply renovating and updating
older homes and selling them onto the public. In some cases it
will be possible for you to do the work yourself, but it is likely
that at some point you will need the assistance of various building
contractors.
Experience
Previous experience
of the building trade and property market is an obvious advantage.
Having the right contacts and skills can help you avoid major
problems and ensure the work is done quickly and cost-effectively.
Project management
experience is also very important. Many people have fallen down
because they have being too ambitious when taking on a project.
If you have limited experience, you may prefer to start with a
small project and begin learning the trade before you progress
onto larger, more complex projects.
Budget
Nearly all
new-build or renovation projects end up going over budget. When
planning your project ensure that you have accounted for every
cost and that you have enough money left over for contingency.
More importantly,
you need to work how much profit you will expect to make once
you have completed the project. Will this be a worthwhile investment
of your time and generate an acceptable income to live on? If
not, you should seriously question the value of starting the project.
Treat the
project as a business and try not to get too personally attached
to the property. Avoid any unnecessary expenses or features, unless
you feel they would add significant value to the home. Generally,
new kitchens and bathrooms add the most value, whilst items like
swimming pools, although very nice, will generate little return
on investment.
Understand
The Local Market
There is little
point in developing a six bedroom mansion on a council estate
or a four bedroom family house on a road predominately occupied
by older people living in bungalows. Try to develop a property
that fits in with the local settings, that way it will be more
desirable when you come to sell.
If you are
developing a family house, ensure it is close to schools and parks,
whilst a trendy apartment for young professionals should be close
to bars, clubs and restaurants.
Keep The
Property Neutral
Properties
that sell the quickest are those that are clean, tidy and non-personalised.
Although you may feel that purple walls and pink carpets are the
greatest thing since sliced bread, many other people will find
the colours offensive and will be put off from purchasing.
When you come
to decorate the property, always aim to use neutral colours, particularly
white, as Changing Room's style makeovers can often be a bit over
the top.
The same goes
for when you are developing or re-developing a property. Ensure
that you keep it simple and that you provide the basic amenities,
for example most families would prefer a four bedroom, two bathroom
house compared to one with five bedrooms, but only one bathroom.
Permission
To Develop
Nearly all
property development must comply with national building regulations
and you may need to seek planning permission for your project.
You should ensure that this is possible before you even commit
to a property. More information
on planning permission.
Taxation
You may be
required to pay stamp duty and capital gains tax on the property.
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