Property Development

[Bakedgoods]

Afternoon all

Ok i've got a few questions about property development. (Buying, renovating or improving and then selling).

If you had the capital to do this, and buy outright. Would you take that approach or take a mortgage?

Can anyone offer any advice on this in general? From what I understand it's about picking the right property, keeping to a strict budget and understanding what to spend on to increase the potential sale value for a quick turn around?

 

[Bakedgoods]

Well that was inciteful

 

[Bakedgoods]

What happens when the company collapses? Are there any repercussions like there are when you declare yourself bankcrupt etc?

Is that really sound advice?

 

[Bakedgoods]

I thought the rules on just 'walking away' changed years ago?

I would suspect it's far less simple than 'just walking away'.

 

[Bakedgoods]

Thanks Jez.

That's an interesting point about mortgaging them when complete as you can effectively get your capital back, but I suppose the issue is what if you can't sell above that price. (You have said your sitting on them though).

I think the plan would be to try a local property first. There's a fair few in decent areas but are incredibly dated inside (really old furnishings etc, look like they are from the 80s).

Do you believe that is a sensible start?

Also, do you carry out much work yourself? The intention would be to do whatever is possible to a decent standard (not a greatl deal), but then get in assistance where required.

 

[Bakedgoods]

Cheers

I think it would only be the basics getting be doing and most things out to someone else.

The issue i've got really is, how do you know how much to budget for improvements versus how much value it will add? Are estate agents going to help you with this or will they just pretty much tell you anything to sell you a house?

 

[Bakedgoods]

I dont really understand the question though? Why would you be asking their advice on development? You should know what the property is worth before and after renovation, and therefore budgets for everything, before you even think about putting in any kind of offer...

What I mean is, without any experience in this area, how do you know what the house will be worth after the improvements to make? Do you initially just base this on similar sized properties that are of the same standard that you have renovated it to?