John P
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| posted on 14/8/07 at 06:01 PM |
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Anyone into Property Development (in a small way)
I was made redundent back in February from a Works Director role with a lift company based in Sheerness.
No doubt because of my age (I'm 58) Ive had no luck at all in gettting back into employment so was considering moving to a smaller house and
using the money this frees up to buy a small property at auction to do up and re-sell.
If I do this it will be in the Torbay area and I could probably do most of the work myself but am a bit nervouse about both finding a suitable
property do do up and also selling it quickly.
Has anyone any experience of this or any advice?
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spaximus
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| posted on 14/8/07 at 06:23 PM |
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Sorry to hear of you loosing your job. On the property front yes you can make money but you can lose it much easier. Finding a house to do up is
difficult and buying from auction you take a risk on the structure as unless you have a survey done on every one you want to bid on you will always
take a risk.
The lack of trades people to do fixed price work is large, unless you can find a team of poles, and the type of area and all up value of house plus
work cannot be more than the area can sustain.
Get hold of a copy of Sarah Beeneys book and look at the pitfalls.
As a private person you will be competing with builders who have the skills and ready cash to jump in. Just go in with all eyes open.
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caber
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| posted on 14/8/07 at 06:29 PM |
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Do a lot of research into the market, see what sells well, it is unusual for properties in good areas to go for auction.
When you have decided on a project remember that you won't live there so you are doing essential repairs and making it look good to sell so
cheap kitchen expensive handles! Fitted wardrobes are not worth it unless you are hiding something with it and magnolia, cream or white paint no
woodchip or artex and get rid of any that is there.
These days people want "new" unless it is a character cottage so new cheap bathroom suite is a good idea, also make floors look good or
carpet them.
It is difficult to make a good profit on a single project without a fair bit of luck. Remember you now need a Corgi registered gas fitter and a
certified electrician so you can't do it all yourself any more.
Best of luck and do make sure you have done all your sums first!
Caber
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thunderace
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| posted on 14/8/07 at 06:31 PM |
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im selling mine off as im sure there is going to be a resession and im not the only one who thinks that .
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pewe
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| posted on 14/8/07 at 06:43 PM |
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John, U2U sent. Cheers, Pewe 
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owelly
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| posted on 14/8/07 at 06:48 PM |
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You need to keep your eye on the ball and know what the local market is doing. Look to see what the future looks like in your chosen area. If the
place has shops that are closing (or charity shops are opening!), it's often a good indicator of what's happening in the local economy.
Round here, any house with more than one floor is getting turned into flats as there is a desperate shortage of property suitable for first time
buyers. Any nice properties are being bought up as holiday houses.
Also consider, that if you overspend or you fail to reach the profit margin you need, could you rent out the property, with the rental income covering
the outlay/loan, until the market value increases?
Look to find somewhere that needs decorating and tidying as a first project and aim to turn it around in less than 6 weeks.
Best of luck.
http://www.ppcmag.co.uk
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JoelP
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| posted on 14/8/07 at 07:19 PM |
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thunderace, people have been STRing (selling to rent) for several years now, people were on about it 4 years ago. No sign of a crash yet. Those people
who sold back then are out of pocket by rent, and facing the prospect that prices may well not fall back to what they sold for anyway. Demand is far
too high for a bad crash IMHO, worst id expect is stagnation or a small correction.
So proceed with caution 
John, its a competetive market. Auction may not be the place to buy as every knows about them now so prices arent always a bargain, plus as said you
would need an eye for structure yourself. I dont have much faith in property nowadays as an easy source of money like it was 5 years back. You would
be very fortunate if you made it pay well enough to not work at all.
Only warm area i can think of is converting places to flats, as this increases supply. However, the regs can be quite complex for flats and HMOs.
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StevieB
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| posted on 14/8/07 at 10:04 PM |
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You'll never lose money on property investments so long as you're prepared to hold onto them for a long time if necessary.
A better bet is to find a development that's kicking off (best with rentable apartments in fashionable areas - ie, young people with good jobs
and no kids wanting to rent) and buy off plan - usually at a decent 15-20% discount over the finished value. Do a google search for Crimson
Investments (one of the few that I use) to get more info on how it can work for you.
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DarrenW
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| posted on 15/8/07 at 09:00 AM |
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Im just completing my second property now as a hobby development project. We have targetted 3 bed semis and detached, new ish (30 years or so) houses
that are ready for some TLC. Bathroom, kitchen, new boiler, plastering and good decor etc, windows if needed. We started by keeping an eye on the
market. There are some websites where you can find out what houses sell for. i try and pick ones that are tired but structurally sound and either have
scope for some future development (good sites for an extension) or already have some features that add to the sales potential (ie to differentiate
them from rest of market). I also pick ones the pro developers cant make enough at but similarly normal buyers deem to need too much work. Profit is
maybe reduced in this area but still some to be had. Ive managed to clear most of my credit card debt and pay off car loan in 18 months. I do most of
work myself but now have some good contacts ref electrical, plumbing, plastering and decorating etc to accelerate the time to finish while im
working.
Now i have some confidence in what we are doing im fancying taking on a bigger project. The hard part is finding the suitable house and timing the
next buy to the sale of current.
Ref selling - to make decent money you have to challenge the ceiling price without being silly but offer a completed house with a neutral wow factor
(i go for good quality fittings but neutral decor - kind of like a show house finish). Budgetting is tricky at first and you must stick to it or make
savings where possible. Know who you want to sell to and cater for them. There are no rules on how long they take to sell and this is the frustrating
part when you want to do them for a living. Im lucky that i can wait to sell but conversely have to live in the house im doing up which can be
tedious.
After all of this just keep an eye on the tax laws. As i live in the house and dont sell within 6 months iam OK to pay off debts first then re-invest
the full profit in the next house. i understand that if you have a spare house to sell you may need to be savvy. I have also considered setting up a
small business in wifes name so we can claim back VAT and claim a wage to off set taxes etc in the future but we are a way off needing to do this
yet.
I guess the only other thing to consider is where to but everything from and negotiate hard. i bought first kitchen from MFI. I got the obligitory 50%
off and then a further 14%. Next one came from Howdens after opening trade account and they beat the first one no problem (and no flat packs!). We are
always on the look out for bargains to keep the budget under control.
My advice is give it a go. Maybe dont be too adventurous with the first and dont set your expectations too high. Its took me maybe 3 years to get a
good contact list together of reliable people but this is now paying dividends.
Both of my houses were on the market for normal money. I made daft bids and was in a position to proceed and managed to get a lump of cash off the
asking price. Both were empty and vendors wanted easy sale. No idea where the next house will be. I may need to drop notes through doors as its
possible my next house wont be on the open market.
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DarrenW
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| posted on 15/8/07 at 09:04 AM |
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off plan is a good way to proceed and maybe not have work to do. My Boss uses inside track. he got a property in manchester. I understand the downside
is you tie up a deposit on something that may not be started so it could be a while until you can complete the sale. If several other investors have
bought in it could flood the market and cap the selling price at first. However you could sell your deposit on for more if the market rises in that
time or plan to rent it out for 6 or 12 months till the prices revover and demand out strips supply again.
I just dont have the free cash to look at off plan currently so settle for getting my hands dirty and being patient.
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