Property Developing.

[jlindsay]

hey guys. just looking for a bit of advice. im 21 and have always wantd to start my own business. im quite good at DIY so i thought i could do property developing. its something im interested in and after watching many episodes of property snakes & ladders i think it is realy something i can do. however, has the property boom really ended? can good money still be made from property? anyone on here still doing this, and making a profit? thanks.

 

[sanjiv]

In my opinion the property boom is going to start soon. It may be good to develop, rent and then sell in a few years. Are you able to get the finance for this?

 

[jlindsay]

well i do not have alot of money as ive just left college, however i should be able to get a mortgage to do this. and do alot of the work myself to keep costs down. yes i agree that property is about to take off again. just not sure wether to wait for it to happen, or do it now while houses are cheap.

 

[sanjiv]

Getting a mortgage is not easy. The rates are high right now.

Its worth a shot and you will make a lot of money if you succeed. Wish you all the best.

It is less risky if you wait but the returns will be lower. You have to sacrifice risk or return mate.

Just my opinion anyway.

 

[Lee Jones Jnr]

There are always good opportunities in property but I wouldn't advise getting involved at this stage as it sounds like you can't afford the outlay.

 

[papverpoppies]

hey guys. just looking for a bit of advice. im 21 and have always wantd to start my own business. im quite good at DIY so i thought i could do property developing. its something im interested in and after watching many episodes of property snakes & ladders i think it is realy something i can do. however, has the property boom really ended? can good money still be made from property? anyone on here still doing this, and making a profit? thanks.

Originally Posted by jlindsay
just started my business 4months ago. on target to making £100,000 profit within a year, although alot of that will be reinvested for expansion.


What happened to this then?

Poppy

 

[MASSEY]

There is still money to be made in property, we buy smaller houses and renovate them in 12 weeks, but we do all the work,

If your not that handy then you profit on the smaller properties will be small,

 

[sellickbhoy]

like any business - it's all about doing your homework and knowing your market.

there are some good buys to be had just now, but it's unlikely they will increase in price much over the next year - so you probably want to take a more medium/long term view in investing just now.

also, your profit will be made/lost by just how much of the work you can do yourself and/or how cheaply you can get a good job done

Don't try and buy a 5/6 bedroom house and rennovate it on a £5k budget and expect to add £30k+ to the price - if oyu do shoddy/cheap work on a more expensive property, you are more likely to lessen it's value.

you might get away with a cheap rennovation on a cheap property - and no one will mind so much, plus, if the place was just needing freshened up, it'll help your sale price a little and probably give you a better margin eventually.

my advice would be to buy at the lower end of the market and turn it quickly with the minimal of work. Cheaper properties always have good rental/sale demand as people are trying to get onto the ladder

Avoid 1 beds, try an older/established property with a garden (a conservatory or nice bit of decking can add a good amount to the value of a house for reletively little spend)

you might also want to live in each house for a year. this means you buy it as a residential mortgage, live in it and sell it on (giving it 12 months to appreciate in value, giving you time to do the work yourself and allowing you to apply for planning permissions/building warrants depending on the work)

plus it also elimanates the risks of capital gains tax on your profits.

then again - if you want to do it in volume (1 or 2 a qtr) then you can't really use the fact that it's your domestic residence for tax purposes.

Speak to a good accountant on what oyu can and can't claim for as i believe different rates of vat apply depending on the goods you buy/type of work you do.

 

[bridges]

My brother in law is a developer, and has now moved into building houses rather than just renovating them, I remember asking him if he was loosing out as so many people were trying to be property developers, he said, no, but now instead of just doing up the houses, he was going in to sort out the mess others had made. This isn't a slight on you or what I think you could do, I'm just saying that things can go wrong.

I do not know anything about you, what your skills etc are like, but I would be very careful. The property market is so tough at the moment, you have to have a lot for a deposit, and serious credit history back up as no one takes any chances any more.

I would suggest speaking to your local agents, we went to have a look at a house, which turned out to be a repossesion, and that needed minimal cosmetic repairs, and that only required a 95% mortgage.

I also agree with what others have said, start small, do a lot of research etc.

I truly wish you the best of luck mate, let us know how you get on.

Vick

 

[estwig]

Singing pig has a very good, newbie to property investment section, be warned them fellas can be very abrasive and they don't take fools lightly.

 

[Deleted member 54079]

Unless you have some money in the bank or a well paid job I think it would be very difficult to achieve what you want to do.

I purchased a repossessed property last May for cash and spent approx. six months gutting the property and bringing it up to a good standard. Fortunately I could carry out all of the work myself apart from the rewire which saved a hugh amount of money. If you intend doing the work yourself you also have to have money to purchase materials, additional labour (electrical and gas work) and also feed and cloth yourself.

Two weeks after the property was advertised for rent I now have a very nice house with very nice tennants and they have signed a rental agreement for twelve months which suits me fine as I do not have any intentions of selling the property for several years.

Just want to buy another now although my wife thinks I'm mad!

 

[Deleted member 54079]

Unless you have some money in the bank or a well paid job I think it would be very difficult to achieve what you want to do.

I purchased a repossessed property last May for cash and spent approx. six months gutting the property and bringing it up to a good standard. Fortunately I could carry out all of the work myself apart from the rewire which saved a hugh amount of money. If you intend doing the work yourself you also have to have money to purchase materials, additional labour (electrical and gas work) and also feed and cloth yourself.

Two weeks after the property was advertised for rent I now have a very nice house with very nice tennants and they have signed a rental agreement for twelve months which suits me fine as I do not have any intentions of selling the property for several years.

Just want to buy another now although my wife thinks I'm mad!

Forgot to add if you buy a repossessed property check completion time as mine was fourteen days which isn't long. Luckily I had a good solicitor who knew the proceedure.

 

[Lee Jones Jnr]

Unless you have some money in the bank or a well paid job I think it would be very difficult to achieve what you want to do.

I purchased a repossessed property last May for cash and spent approx. six months gutting the property and bringing it up to a good standard. Fortunately I could carry out all of the work myself apart from the rewire which saved a hugh amount of money. If you intend doing the work yourself you also have to have money to purchase materials, additional labour (electrical and gas work) and also feed and cloth yourself.

Two weeks after the property was advertised for rent I now have a very nice house with very nice tennants and they have signed a rental agreement for twelve months which suits me fine as I do not have any intentions of selling the property for several years.

Just want to buy another now although my wife thinks I'm mad!

Forgot to add if you buy a repossessed property check completion time as mine was fourteen days which isn't long. Luckily I had a good solicitor who knew the proceedure.

6 MONTHS! Was it your first time?

I know that I am repeating myself but I agree very much with the above post, you must be able to afford the expenditure required. People underestimating the task at hand is partly why there are so many repossession bargains to be had.

 

[Aussie Dean]

I saw the Property Ladder the other day and I thought it was cool so I thought i'd do it coz it looked easy.

If I were you I would be doing alot more research and reading before giving this a shot. Also dont listen to too many opinions from people who havent done this sort of thing as they just like to give advice on things they have heard....

Like sanjiv in this thread for example.

"In my opinion the property boom is going to start soon"
If anything I think that the UK resi market is in something called a dead-cat bounce.

"Getting a mortgage is not easy. The rates are high right now."
Yes loans are tough to get unless you have a half-decent sized deposit but interest rates are at record lows.

 

[Barnie]

property boom should not matter to you, it is only ideal for second home owners

in the past the boom has been pretty good at covering bad developers arses ie blind developing, you could wreck the place still see a profit and think its down to your diy skills, the market is not as forgiving now so plan well

iv seen alot of people rush into buying properties, they simply have to be developing to make money, but doing 2 good ones a year will be far better than 4 bad ones, get a bad one and you may have to sit on it as well

 

[vvaannmmaann]

Being quite good at DIY does not qualify you to take on any serious property renovation.
Are you a trained electrician,plumber,carpenter,gas fitter,glazier,carpet fitter,roofer,tiler,tea brewer?
Thats before you start dealing with builder's merchants,estimating quantities of materials,arranging for wet and dry trades to co-ordinate,ordering skips,dealing with asbestos,underpining.
Then there is the Planning officer to keep happy and Building Regulations to comply with and all the Health and Safety requirements?
Apart from all that lot,it'll be easy.
Good luck with it.

 

[sanjiv]

How do you know that I have not done this sort of thing? Do you disagree that the property boom will start soon? Have you done any property development?

 

[sanjiv]

I saw the Property Ladder the other day and I thought it was cool so I thought i'd do it coz it looked easy.

If I were you I would be doing alot more research and reading before giving this a shot. Also dont listen to too many opinions from people who havent done this sort of thing as they just like to give advice on things they have heard....

Like sanjiv in this thread for example.

"In my opinion the property boom is going to start soon"
If anything I think that the UK resi market is in something called a dead-cat bounce.

"Getting a mortgage is not easy. The rates are high right now."
Yes loans are tough to get unless you have a half-decent sized deposit but interest rates are at record lows.

How do you know that I have not done this sort of thing? Do you disagree that the property boom will start soon? Have you done any property development?

 

[Lee Jones Jnr]

How do you know that I have not done this sort of thing? Do you disagree that the property boom will start soon? Have you done any property development?

It appears that you haven't because you give credence to a property boom affecting this idea as a business.
Do you develop property?

 

[sanjiv]

No I do not develop property but my father does and he is very successful. Do you not agree that if you can afford to buy property, it is best to buy it when the prices are low and then sell in a few years when the prices pick up again? Property is a long term investment. I wasn't suggesting buying it and selling it a month later.

 

[Lee Jones Jnr]

I don't like selling most of the time so I buy, renovate and then rent properties.
I have flipped a few times and I don't see any reason not to buy, renovate and sell as quickly as possible. Property does not have to be a long term investment, you can simply buy, renovate, sell, buy, renovate, sell etc.
I certainly don't think property is something to involve yourself in when you can't afford it as in the OPs case.

 

[sanjiv]

I agree to your last statement. Buy, renovate, sell is good however only good when you get a property really cheap. My dad buys and rents them out. So far, he has sold about 5% of what he bought but its only really worth it when you can get a really high price.

OP says he is good at DIY and if he enjoys it, then it would be better to buy, renovate, rent and then sell when there is a good price to then be able to buy a house or several in poorer condition to do up.

 

[Lee Jones Jnr]

I agree to your last statement. Buy, renovate, sell is good however only good when you get a property really cheap. My dad buys and rents them out. So far, he has sold about 5% of what he bought but its only really worth it when you can get a really high price.

OP says he is good at DIY and if he enjoys it, then it would be better to buy, renovate, rent and then sell when there is a good price to then be able to buy a house or several in poorer condition to do up.

No it wouldn't. He doesn't have the funds.
He/she would be better starting a business or job to generate some cash and then buy when it is more financially viable.

 

[bridges]

I think it is about playing to your strengths, a lot of people want to keep moving forward onto the next property, and if they can, and are doing it right, why not?

Plus quite a lot, in the beginning anyway, wouldn't have the option to rent, and buy another, they'd have to sell the first to pay for the second.

Anyway, in the end it is about what is best for you/your business.

 

[sanjiv]

No it wouldn't. He doesn't have the funds.
He/she would be better starting a business or job to generate some cash and then buy when it is more financially viable.

Sorry. I missed that.
He needs to generate some cash.

 

[jlindsay]

thanks for all the advice guys. yes i do agree that it would be alot easier if i had £120,000 to buy a house outright. however i dont. i could afford a deposit tho. i was recently talking to a mortgage consultant i know and he said that i could easily get a mortgage. in response to my diy skills, in my day job i do alot of physical labour including plumbing and electrical work, although nothing too complicated lol. the way i look at it, id just buy a property, give it some tlc, modernisation and minor improvements, therefore would not need th useof architects or planning consent. is this a viable business or just a dream?

 

[sanjiv]

You may be easily able to get a mortgage but you will have repayments and interest rates for mortgages are pretty high.

 

[Lee Jones Jnr]

thanks for all the advice guys. yes i do agree that it would be alot easier if i had £120,000 to buy a house outright. however i dont. i could afford a deposit tho. i was recently talking to a mortgage consultant i know and he said that i could easily get a mortgage. in response to my diy skills, in my day job i do alot of physical labour including plumbing and electrical work, although nothing too complicated lol. the way i look at it, id just buy a property, give it some tlc, modernisation and minor improvements, therefore would not need th useof architects or planning consent. is this a viable business or just a dream?

It is possible and can be very profitable, however it isn't really a business to go into with borrowed money. If you can find a property that is affordable and will still turn a profit after materials, labour and interest payments have been accounted for then go ahead!

 

[Hot Line]

Go a head

Buying property is always a wise decision.

Buy one
DIY
Improvements
Try to sell (If not than)
Rent out (if not than)
Live there (than)
Sell

 

[brianp]

^ Thanks, estwig. That's exactly what I was looking for.

 

[scribe]

hey guys. just looking for a bit of advice. im 21 and have always wantd to start my own business. im quite good at DIY so i thought i could do property developing. its something im interested in and after watching many episodes of property snakes & ladders i think it is realy something i can do. however, has the property boom really ended? can good money still be made from property? anyone on here still doing this, and making a profit? thanks.

From reading your previous post, i would say your just a dreamer and to be quite honest you talk a load of B*****ks

 

[oldeagleeye]

I have to agree with Scribe because the OP obviously deliberately overlooked the question put by Poppy which was.

'What has happened to the 100K he was on target for this year in a previous post.

Whats more this talk of a mortgage is crap. What sort of mortgage can a casual labourer raise. 60K tops if he has been in regular employment for a year earning £20K a year.

He obviously doesn't know either that he has lttle chance at buying at auction. As well as a substantial deposit the BS will also hold back the cost of repairs.

Train to be a plumber OP. Your be far better off in the long run.