Property Developers & Self Builders
“Don’t go in blind”!
With the improvement in the national economy and interest rates at their lowest ever level, many people are looking towards property as a means of improving their investment potential.
It is true, there are many opportunities in property but there are also many risks. As a developer I have had 35 plus years in the property industry and am well placed to offer new developers and self-builders the benefit of my extensive experience. In the past, many new developers and self-builders have said to me “where do I start”. This has led me to tabulate a formula to be followed when considering a property investment.
My starting point is a Feasibility Study, which I prepare for every new project. This Study will determine the viability of the project and will encompass both sides of the cost and income equation. An important element of the Feasibility Study is identification of risk.
Development risk will differ for each project and will include site specific physical risks, planning restrictions, listed building and conservation area limitations, funding risks, building risks and limitations, taxation and many other considerations. The Feasibility Study is all about helping you to make the right decision on your choice of investment. Now the fun begins, developing your investment to create a valuable asset. I will introduce you to other tools to enable you to control cost and maximise your profit, often referring back to the feasibility study to ensure your project is progressing in accordance with the plan.
What can I expect from my feasibility Study?
Every property or land (site) has to be evaluated individually so my format is based on the same principles for each project, simply remember it is better to know the risks before you invest.
Example;
- The proposed site detail’s and address.
- As much information about the site that is available.
- Asking price of site and what price to expect once completed?
- Project risks; Does The site require any planning applications (including Listed consent if applicable), if planning consent is required then once approved we will need an application for building control, will the site require the services of a planning consultant, an architect, a quantity surveyor, soil/ground survey, structural engineer or a damp report? What information do we have regarding any searches that will have been carried out? Is there electric, gas, water and foul drainage either on the site or close to it?
This has covered most risks but it gives you an idea of the depth we need to go into to make sure all eventualities are covered and if applicable included in our cost report.
Costs;
5. We already know the asking price “say” X.
We have now established all the risks so any of them will be factored into our financial assessment.
We have construction costs.
We have legal costs including stamp duty if applicable.
We have planning and any professional fees if applicable.
We have estate agents fees.
We have interest costs on any borrowings.
Once we have all these costs we can then evaluate if the project is viable, if positive you can then negotiate with the selling agents on the price, everything you can negotiate downwards improves your final result.
6. If however our feasibility study works against a project you have the knowledge that you have not wasted considerably over and above the cost this study will have cost you and it is not only money, it is the time wasted when you could be working on a positive project.
7. On completion of every project we would always recommend you invite two other selling agents to give their opinions on selling and renting valuations.
To conclude this report we will let you know what the building cost should be for you as a self-builder with yourself as project manager and also what to expect if you engaged a builder to carry out all of the work.
If you are interested in taking advantage of these valuable
services please call me for a no obligation quotation.
Remember my statement “Don’t go in Blind”.
