As a developer, you will always have your eye on potential property bargains for investment opportunities. The aim of the game is of course to snag something at a low price, spend as little as possible and sell it on for maximum profits. The only issue is renovating properties can throw up a whole host of issues that can put a spanner in the works. From uncovering asbestos, to dodgy DIYers compromising the structure to pests. For these reasons, you might be considering building something from scratch to sell on instead. Here are some of the pros and cons in doing so.
Pro: You Get More Creative Control
Rather than having to spend thousands re-jigging the layout of old properties to suit modern lifestyles- you can plan things and get everything right from the get-go. You can include any added extras such as loft conversions, en-suites and walk in wardrobes without having to work out how to fit these into existing rooms. You also get to decide on the fixtures and finishes and can choose styles that you know will most appeal to buyers and make you the most profit. Enlist the help of a professional such as Nidus Architects to guide you through the design process.
Delays can be unavoidable in both renovating and building. But when you’re starting from scratch and all of the work is being done outside, you have issues like weather to factor in. Some tradesmen such as builders and electricians can’t work in certain weather conditions. And so there might be a big part of the year where your project doesn’t make much progress. Planning to start during the drier seasons is a good idea, although that can mean waiting for many months in some cases.
Pro: Building Works Out Cheaper Than Renovating
If you have a good team of reliable tradesmen, building a house works out cheaper than buying one ready finished. Buyers generally want ‘move in ready’ homes, so once you finish a property, you can bump the price right up. So not only do you get to create brand new properties exactly how you want them, it works out cheaper for you too.
Con: Planning Permission
When you buy a plot of land, unless it’s being sold with planning permission already you will have to make an application for this yourself. While councils are often eager for developers to build on these waste land plots and re-invigorate the area, planning permission can still take a while to come through. You’re also likely to be restricted on certain things. For example, you might only get granted permission to build houses with a certain number of bedrooms which will most appeal to the local market. You will probably also have to build properties that are in keeping with the houses in the area regarding looks
Would you prefer to build a property to sell, or would you go down the renovation route?