Ask anyone who has brought from an auction and they’ll tell you that the main reason they brought was because of the difference in price. At auctions you don’t get the Estate agent’s telling you how much the competition want it or the facts it’s under offer. The truth is Auction properties attract developers, investors and owners because of 1 thing – they are typically cheaper. I’ve seen properties go for 33% less that their private treaty counterparts.
But times have changed in recent years. There is a lot less property available on the market and even the most affordable home now attract stamp duty. This makes finding a devleopment oportunity rare and buying one that will enable you to make profit even rarer. Continue reading
So here is the big question, “how to make money from property”!
I’m not going to gloss over this or give you some easy to follow formula that will guarantee unbelievable wealth. Every Property developer I’ve ever met has had more than their share of stress. But, making money from property is possible if you know what to look for and how to manage a project. I’ve been developing for over 20 years now and I’ve made more than my fair share of mistakes. I’ve brought too high and I’ve sold too low. I’ve spent too much and I’ve also not spent enough! Over those 20 years I’ve always learn from my mistakes. So whilst this formular might not work for everyone, if I was to go back to 1993 and give myself some advice, this would be it.
Being a property developer carries considerable risk that normal employees know nothing about. The greatest of these risks is the need to borrow in order to finance your project. If you are uncomfortable with borrowing large amounts then property development probably isn’t for you.
Property development for me was never just about making money. In my 20′s I commuted for 2 hours a day, I worked doing something I didn’t belive in, working for someone I hated. I was renting and most of my income went on rent, commuting and post work socialise. I had very little savings and the future worried me a bit.
Any property developer will tell you that “you make your money when you buy not when you sell”. Whilst this is true there is no harm in reducing your selling costs either. Heres a few tips I follow;
I’m often asked what I do. The easiest way to answer this is to provide you with an insight into my day.
This is a pretty usual day for me I wake up fairly early and get to a site I’ve been working on for the last few weeks. I’m coverting a detached 1960′s house to include a loft space. Under new planning laws it’s easy to convert loft’s under the new ‘permitted development laws’ that allow any devleopment to take place as long as it’s under the maximum of 30% of the overall property foot print but I am not a planning expert so always see your local authority planners to discuss your ideas first. They’ll be able to tell you if you need to nmake a plannign application or not.
Not everyone is cut out to be a developer. Developing property can at times be duanting and highly pressured when things go wrong ( and they do). You’ll need to be fairly robust and not mind the odd hardship when cash flow is tight. This means being able to focus on the problems that need your attention when a wall is missing or a tradesman hasn’t turned up.
Being organised and posessing the ability to deligate to the right people are the best qualities in any developer.
In fact you’ll need a pretty cool and focused attitude to the whole process. In my experience it’s those that can plan well that avois the stomach ulcers. If you’re a good planner and list writter, chances are you’ll make a great Developer. Being able to consume tasks from early in the morning until late at night can only be done if you’ve got a schedule , plans and you keep to it!
I’ve seen teenagers buy at auction and I’ve seen pensioners get into developing.
The truth is you don’t need to be a construction expert (although a basic knowledge would help), nor do you have to be a financial Whizz. You just need to see beyond the building site and see the vision and have the tenancity to see it through.
I’m often asked why I chose to become a developer. The truth is I did not make a conscious decision to become one it just seemed to happen. I was in my 20′s living and working in London, life was pretty good. I would work hard but I’d also play hard too – it was enjoying myself. I then became 25 and things went a bit serious. I was spending everyting that I was earning and most of it was going on rent. I needed to get on the property ladder.