Should you live on site in a development?
December 19, 2008
When you’re developing a property it’s important you keep costs down as much as possible, as every penny you spend eats into your profit, and renting somewhere else while you develop a house costs you money.
Saving money by living on site in a development isn’t the great idea it might seem at first. When you live on site, depending on the scale of the development, you could end up taking cold showers, sleeping on the floor and spending all of your time dirty, without a real toilet. While your kitchen is being developed you’ll also end up eating a lot of takeaways, which isn’t good for your health, or your budget – as they’re very costly to eat every day.
Of course if you do rent somewhere that will eat into your profit considerably, as you’ll be paying rent on top of the mortgage for your development.
A better, and cheaper, idea is to buy a caravan and live on site. This means you’re always there at your development, meaning you can save travelling time in the mornings, and you’ll save money in rent. You’ll have a working kitchen and a real bed to sleep in.
Better yet you can sell the caravan when you’re finished for much the same cost as you paid for it. Depending on the time of year you bought it, you might even make a profit by buying out of season and selling when it’s sunny.
Popularity: 8%
Can you still develop property in the current financial market?
December 18, 2008
You cannot have failed to notice the global economic downturn the world has been experiencing of late. Banks are going under, businesses are going out of business and the housing market has crashed. Financially speaking, it’s doom and gloom for all.
But is it really? Can you still develop a property in today’s economy and make a profit, the way you could a few years ago when the market rises were so profound that they made up for any errors and overspend from property developers.
Well, as a result of the crashing market, it does mean that properties are a lot cheaper to buy. This means you can pick up some real bargains, and in some cases this means houses half the price they were two years ago. Of course, the difficulty is in getting a mortgage, with many lenders only offering 75% mortgages most people will struggle to raise a deposit, so the situation only really favours those with ample capital.
If that describes you, you’re in a very strong position. You can purchase a property for a fraction of the cost from a few years ago, taking advantage of very cheap interest rates to keep your repayments right down, and letting the property out for a serious profit.
It’s a buyer’s market, so haggle hard. With house prices set to fall even further early next year, either your offer gets accepted now, or you go back with a lower one next year.
Popularity: 12%
Do it yourself or have a letting agent take care of it?
December 17, 2008
In the current housing market many people are finding that they can’t get themselves a remortgage when their current fixed rate deal expires. This means they’re left with the option of selling their house, or if they can, letting it out.
Of course, when it comes to letting out a house you’ll probably need to make some changes to ensure that it’s rentable, such as new carpets, getting the boiler certified etc. When you do this, you can either get the work done yourself, or you can use a letting agent. Using a letting agent means you’ll end up paying a management fee, usually around 10%, but it has a number of advantages.
A letting agent will liaise with the tenants for you, so that you’re never bothered about problems around the house such as maintenance. A letting agent will be responsible for collecting the rent, so that you don’t have to do it, and they’ll provide you with invoices for your tax.
Finally the letting agent will arrange for any development or repair work that needs to be done on the house, such as if the roof needs fixing or a door needs repairing. This takes the worry from you, all for 10%.
Popularity: 13%
Keep it neutral
December 16, 2008
When you’re looking to do up a property in order to sell or let it, the one biggest piece of advice that everyone should follow is to keep the décor neutral. It can be tempting to put your own stamp on a property, but doing so is both a financial waste, and a hindrance towards your letting of the property or trying to sell it.
For example, when developing a property you need to make one important decision from the outset; do you intend to live in it? If the answer is yes, then by all means spend as much as you want on your carpets and furnishings, and make the décor as personal to you as you like. If the answer is no, you don’t intend to live in the house, you need to make sure the décor appeals to as many people as possible.
Some people are worried about neutral colours as they may show up dust and dirt more than vivid colours would. There are two options, keep on top of the cleaning yourself, dusting regularly, or simply hire professional services, let’s face it, with competition the way it is at the moment, finding cheap house cleaning in London and similar big cities is a cinch.
You might like reds and yellows as a colour scheme, but the person most likely to buy or live in your house might not, therefore decorating with your own style will put off more people than it will attract.
Also, if you’re planning to let the property there’s no point paying for expensive carpets when your tenants may not be as careful with them as you would be.
Popularity: 8%
Stop arguing with Sarah Beeny
December 13, 2008
Anyone who’s ever watched the property development show Property Ladder will know that cutting costs during your development is essential. For example, there’s no point spending £1,000 on a bathroom sink unit and £1,000 on a toilet pan when you’re trying to make a profit on selling the house.
However, it seems that most people on Property Ladder don’t realise this. When they’re developing the properties they get too emotionally involved in the development and want to add their own stamp to the development, using their own tastes. It’s as if they’re planning on living there themselves.
Sarah Beeny, the host of the show and a successful property developer herself, always gives the same advice. Stick within budget, don’t buy expensive items for the house when you’re planning on selling it and don’t make it too personal. Keep everything neutral and you’ll appeal to more buyers.
Yet time and time again they refuse to listen. In recent years the property developers have got away with ignoring Sarah because the rise in the housing market has made up for any extra expense they’ve made, but in the current climate they won’t get away with that.
Listen to Beeny!
Popularity: 8%
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