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Property Development

post #1 of 4
6/25/10 at 5:15am
Thread Starter 
So there must be one or two gents out there who've turned their hand to the high-flying world of property development.inverstment.

I'm looking for advice on how to start. I wont be in a position to start buying for another 5 years, but I want to start learning now so that I'm not so much of a newbie when I actually end up parting with cash.

How did you get into it?
What methods does one use to ascertain the rental value of a renovated property? (Surely asking an estate agent is an expensive method?)

Any general tips for a newbie?!
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post #2 of 4
6/25/10 at 7:52am
Are you buying to rent or to sell. If for rent then it is a numbers game and the cost of money versus rent is the pivotal factor. Do not ignore commercial property where tenants may stay longer. If you are looking to sell then you need to have a team of artisans who you trust to do any work you are planning to increase the value of the property. You also need to work to a deadline, the longer you own the property the more it will have cost you and the smaller you profit. Do not over develop a property for its street, there is a maximum people will pay to live in a location.
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post #3 of 4
6/26/10 at 11:22am
Quote:
Originally Posted by Blackhood View Post
So there must be one or two gents out there who've turned their hand to the high-flying world of property development.inverstment.

I'm looking for advice on how to start. I wont be in a position to start buying for another 5 years, but I want to start learning now so that I'm not so much of a newbie when I actually end up parting with cash.

How did you get into it?
What methods does one use to ascertain the rental value of a renovated property? (Surely asking an estate agent is an expensive method?)

Any general tips for a newbie?!

the only advice i can give you is to save as much money as you can. i beleive properties in the UK are positively geared (rent earns more than mortgage costs) so all you need to worry about is equity and buying a place which is attractive to the biggest segment of the rental market - ie apartment near a university etc.

as for determining potential rents to be earned after renovating, do your research, go and visit as many places for lease in your area as possible. build up a database of rental yields vs property prices in the areas you are interested in.

alot of realestate websites will allow you access to past sales data for that area for a small fee - at least in Australia. Real estate laws vary widely between Aus and UK tho.

The main thing is dont watch too much Property Ladder - the women in that show is very annoying.
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post #4 of 4
6/26/10 at 11:28am
Quote:
Originally Posted by culverwood View Post

If for rent then it is a numbers game and the cost of money versus rent is the pivotal factor. Do not ignore commercial property where tenants may stay longer.


not sure what the scenario is in UK but generally commercial properties have higher yields than residential. also, hopefully you are renting to a reliable buisness so you dont have the woes of late rent payments etc. leases can be alot longer term as well. in addition to this they tend to pay for all fit out and repairs (you lease them an empty shell)...

on the downside, captial growth is generally alot lower and you need to be cautious of buying a dud, a couple of failed buisnesses in your property could make it seem a bit 'cursed' and it will end up being vacant long term. vacancies in neighbouring properties can also make your place look pretty bad.
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