Developing a property on a shoestring budget can be difficult, but being frugal and ingenious can be more satisfying. Here are our hot tips for making the most of your budget.
Fearless honesty as well as enthusiasm is what you will need right from the word go. Take apart your day-to-day finances as well as those you have set aside for your development project, and immediately try to trim away any unnecessary expenses from your life. Save yourself money now, because you WILL need it later. Stuff happens...
Never plump for the first mortgage that you are offered. Research the available products yourself, but then go through your finances and your business plan with an independent financial advisor (IFA) whose services have been recommended to you by someone you trust. Your IFA should then be able to suggest a range of mortgages at the best possible rates, and also identify a figure that you can realistically spend on a property without getting into serious trouble.
Quality hotspot properties will almost certainly be beyond your budget so look for something unusual within a desirable area that you could possibly develop as a marketable home (say a garage, outbuildings or derelict land) or, better still, try to gauge which will be the next area to take off in terms of desirability. Areas next to hotspots regularly become hotspots themselves if they possess the right cocktail of desirable elements. Remember it is always better to try and redevelop the worst house on the best street rather than the other way round. Have in mind at all times the kind of buyer at which you will be targeting the refurbished property, and the highest price that a property of that type will fetch locally.
There is no point jumping at the first property that seems to come your way. Trust your instincts, and research every angle before jumping in. Remember your profit margin and the feasibility of your project depends entirely on getting the best deal possible. If a property in your target has been on the market for a long time then make a low offer. The vendor may be grateful of a lifeline.
Sarah Beeny shows you how to become a successful property developer
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