If you are wanting to go into property investment, but have no idea where to start, the concept of finding a plot of land and transforming it into a fully-fledged home that you can then sell on, can be a very daunting prospect. However, follow these guidelines and it won’t be long until you start reaping in the rewards.
1. The right land
When examining what is available, it is important to consider two main factors: your target market and potential for money. You are going to want to sell the property on in the future so you need to make sure there is a healthy customer potential in the region. Do your research with estate agents on how well homes are selling in the area and at what prices.
Look at the surrounding location as this will affect the future value of the property. Even the nicest of premises will be worth less if it is in an undesirable area. Consider recreational opportunities, neighbours, crime rates, the quality of schools, and a location that has easy access to motorways or public transport.
When looking for land, it is tempting to run with something that will offer creative opportunities, but choose to go with your head over your heart. You want to make a nice sum from this, so think of practicalities.
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2. The regulations
The first thing to always do is assess the land through a reputable surveyor, whilst a solicitor should be hired to check all the paperwork. The latter will also check any planning permissions that may or may not be on the property. If the land has no outline planning permission (OPP), you actually cannot build on it. An OPP will allow a new site to be constructed,but the type, size and design of the property will further need to be approved by your local authority. A detailed planning permission (DPP) means you don’t need any approval, but building must occur within the first two years. An OPP is valid for five years.
A planning representative from the council will inspect the land and then you can send a formal application off. The council’s planning committee will make the final decision.
Building regulations will also need to be considered so that all properties are built to the highest standards and potential tenants are not put in risk.
3. The building
You can try your hand at some construction to save large amounts of money, but the quality may suffer if you don’t have much experience. Consider that it will cost you to rectify any mistakes. If you have a full-time job, you will then have to bring in a developer, but aim to secure a fixed-price build contract, as many cowboy builders may try and scam you if they see you are a novice.
4. The sell
This will be the final stage and the property should ultimately be seen as a product. Market the property correctly to the right target audience, and consider using an estate agents and other advertising tools, such as community notice boards or the Internet.
You may find that the property does not get valued to your estimations, but house prices may naturally rise in the market so the difference will be compensated in the future if you hold on for a bit. Obviously, you will also be running the risk of the value falling even further. Keep an eagle eye on market trends so you do not end up losing out.