Cost of building flats.

VTR

VTR

VTR

Soldato
Joined
29 Oct 2002
Posts
4,273
Location
South Wales
I know this question is pretty much a how long is a piece of string question... but what would be a rough ball park figure for building 4 2 bedroom flats on some land. The area is Neath, South Wales and I own the land at the moment. It currently has outline planning permission.

Would I be able to get a mortgage in order to build the flats? Using the land as an asset/security in order to get the mortgage. I currently earn around 21k a year and live at home. Assuming I can get a mortgage for 4 x my earnings that would be 84k + the land is worth around 40k so 124k total - no idea if this would be around what I need or if it's going to be a lot more?

Obviously I'm going to get some professional advice on this but just wondering if anyone on here has any idea?
 
Building flats in a recession, good luck.

Just sit on the land and wait for the next boom you will be able to make some nice wonga.
 
cheets64 said:
Building flats in a recession, good luck.

Just sit on the land and wait for the next boom you will be able to make some nice wonga.
Click to expand...

Well it was valued at 100k but has dropped significantly recently. Was up for auction with a 50k reserve around 6 months back, got bid upto just under the reserve but the buyers then pulled out (offer was accepted but they then changed their mind) It's now up for £40k with no interest.

With the recession I thought now would be a good time due to people needing work. Only hard part I can see is getting a mortgage - but with the land as an asset to invest into it then I thought it may be possible?

edit - and at the moment I have no idea of the development cost, at ~120k then I reckon it could be an option, but 200-300k then obviously it's going to be out of the question. I have no idea of how much it would cost at the moment, just after some opinions if anyone has any experience in this.
 
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How much are flats going for in that area currently? You should speak to a builder who would be capable of taking on such a job, you will probably find that your mortgage on the land could not cover it. Then talk to the bank and see if they would be willing to extend the loan you could get on the flats which are to be completed, but do not expect anything anywhere near the value 4 flats are currently selling for.

Good luck!
 
Assuming a 2 bed flat would be around 650 SQ ft (not huge but ok) so total floor area would be 2600 sq ft. Assuming a low quality finish would be 80 to 100 per sq Ft so around 200k plus would be a very minimal estimate.

So unless each flat is worth over 100k I would not even bother.

EDIT: I don’t know much about this stuff so I could be way off
 
Forgot to mention I'm thinking of building them to rent out. 2 bedroom flats are going for 400-500PCM at the moment around here.

Obviously I need to get some professional advice on this and speak to a builder etc for estimate's, just wondered if anyone on here has any experience?
 
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