Follow this advice to get the best from your self build project:
1) Pull together a good financial plan that shows all your project costs, contingencies, fees, loan payments.
Package this into your projected sales value and calculate your headline profit. Since your scheme is all about profit, have this plan in front of you at all times (except when driving of course!)
2) Learn about taxation. You can build a house, sell it for profit, incur no tax and get all of your VAT back!
3) Land is your biggest cost. Be creative about finding hidden opportunities. There are parcels of undeveloped land and low standard houses that can be demolished in every county.
If you invest some time understanding planning matters and doing a little local investigation, you will eventually come up with land below its full market value.
4) Design a ‘market friendly’ property. You must incorporate features and layouts that are in general appeal. A few suggestions are – Multiple bathrooms, guest accommodation, office space, ‘mixed plan’ i.e. a complimentary mix of open-plan and private space.
5) Get the best finance you can. Self-build is very easy to finance and 95% loan to final value is widely available.
This means that you can generate huge returns on your investment. Work your scheme so that the built value is higher than your borrowings at all times. This will ensure good liquidity and very little funding on your part. Do this by agreeing long payment terms with all of your suppliers.
6) Assemble and maintain a good team of people. Its essential to developing trust and mutual respect. These are the conditions under which people really thrive. You must show integrity and fairness whilst at the same time expecting a lot. Good people are extremely rare.
Treat them with the utmost respect and expect them to do the same in return to you!
7) Write everything down. Written agreements are arbitrators for when things get out of control. Relationships can fall apart over the most minor of misunderstandings. Written records can quickly pull things back into line.
8) Bargain shop like crazy. Focus hard on your top five cost items and negotiate them with a vengeance. Most retailers mark up by at least 100%.
There is plenty of margin to reduce this. Even better if you can go higher up the chain. If you can buy from the manufacturer you know you have no middleman to pay!
9) Know your subject. If you can develop a working knowledge of construction you will benefit by being able to drive higher quality and by being able to recognise problems early.
If you can spot a quality problem on the first day you use a builder, their work will be far better from that day on!
10) Don’t lose track of the project for the sake of DIY. You may think you are saving money. The reality may be that you are the only one working!
11) Finally, enjoy yourself. If you are happy in your work, you are more likely to make huge profits!