Property Strategies (Part 8)
We’ve been thinking about the principal property strategies that we can use in today’s market and this week we are going to think about one of the most exciting property strategies out there – developments.
There are many different ways that we can approach a development and they can all be very profitable indeed. For example, commercial conversions where by you convert an office building, pub or even a particular type of industrial unit into residential accommodation, using something called PDs – or permitted developments.
This is quite a huge subject but in short, the Government has introduced tweaks to the planning laws which make it much easier to apply for planning if you’re converting a property such as an office into residential accommodation. Essentially, if it’s under a PD or permitted development, then you have to be granted the planning to go ahead.
Of course, there are certain safeguards so you can’t just do what you like – but if you talk to the planning office then they have to give you consent. This has opened up some great opportunities for some serious investors.
Now, I’m not saying that you should jump in and do this – especially if you’re just starting out – but there are some other types of developments that can also be very profitable even though they are on a much smaller scale.
For example, you could find a house and convert it into two flats. This is almost considered “title splitting” because you would be buying a freehold house, turning it into two flats and would presumably have each on a long lease.
Or, you might consider “building” – in other words, buying a plot and building a house or even several houses on the land. This would then leave you with the choice to either keep the properties and let them out (i.e. build to rent), or to sell them on.
Just the other day, I was with an investor who has access to what they call modular buildings; buildings which are actually produced in a factory. This is very exciting because it’s now totally conceivable that you could buy a plot of land, get somebody in to do the groundwork, i.e. putting in the foundations and making sure that the utilities are in place, before actually “dropping” a property onto the plot. The property is delivered on a lorry in three or four chunks and you can literally assemble a whole house in one day. (It even comes with all the plaster on the walls and with carpets on the floors!)
Nowadays, there really is so much that we can do under the general term of “development” – and much more besides – and this could be a great thing to get into should you wish to pursue this strategy. Yes, it is somewhat more sophisticated than doing single lets or buy to lets, but with the country crying out for new housing, this type of investment could be the way to go.
Here’s to successful property investing.
Peter Jones B.Sc FRICS
Chartered Surveyor, author and property investor
By the way, I’ve rewritten and updated my best-selling e-book, The Successful Property Investor’s Strategy Workshop, which is an account of how I put together my multi-property portfolio, starting from scratch and with no money of my own, and how you can do the same. For more details please go to: www.ThePropertyTeacher.co.uk/the-successful-property-investors-strategy-workshop