Three Tips for New Property Developers Who Are Building Their First Development
If you are a new property developer and are planning to build your first development, you might want to keep the following advice in mind.
Subdivide the land
If possible, you should try to subdivide your land into multiple plots before you start building. The reason for this is that a subdivision consisting of, for example, four houses on separate plots is likely to yield much higher profits than one very large house built on a single plot.
If you decide to take this approach, it is important to bear in mind that it may take longer for the construction process to get underway, as you will most likely have to make a subdivision application to the local authorities in your area and have additional surveys performed by a land surveyor.
However, the time and money spent on subdivision should eventually be offset by the higher profits that will probably be generated by subdividing the land instead of building on one large plot.
Spend a little more on the materials for the roofs
If you intend to be a property developer for many years to come, then it's vital to invest a large proportion of your funds into buying high-quality materials for the roofs of your houses.
The reason for this is as follows; the quality of a house's roof plays a key role in its lifespan. If the roof is made from cheap materials, it could start to develop holes in a matter of months, and its structural components (i.e., the trusses or the rafters) may begin to deteriorate quite rapidly.
The holes could result in the house sustaining rainwater-induced damage that could destroy the building's wooden framework, whilst the rafter or truss deterioration could affect the roof's structural stability and increase the risk of it caving in during future storms.
If this happens to one or more of the houses that you sell, your professional reputation could be ruined very quickly, and you may find it difficult to sell any other properties that you construct in the future.
Test the soil for asbestos before your contractor starts the building process
Because it is a naturally occurring substance, asbestos can sometimes be found in soil. As such, is important to have the soil on your plot tested for the presence of asbestos before your contractor starts the building process, as it is possible that it may contain this substance. If it does, you will need to have it removed by a specialist before continuing with the construction project.
The reason for this is as follows; if your development is built on soil that is contaminated with asbestos and you fail to remove it prior to building and then selling your houses, you may be sued for compensation by the owners of those properties, if or when they discover the asbestos. This could ruin your reputation and have serious financial repercussions.