This is the last in the series of the different property strategies that we can use in today’s market, and so this time we are going to think about how we can ‘up our game’ and make our investing far more sophisticated with “Developments”.
Possibly the most exciting strategy out there, there are many ways in which we can approach property development and they can all be highly profitable indeed. An example of a development could be a commercial conversion in which you take an old office building, pub or even industrial unit, and convert it into residential accommodation using what is known as a Permitted Development, or PD.
Having amended the planning laws, the Government has made it easier for property investors to apply for consent, for example, to convert a property such as an office building into a residential block. As such, under a PD or permitted development, you are likely to be granted the planning to go ahead – and this has opened up opportunities for the most serious of investors. Of course, there are certain safeguards so you can’t just head off and do what you like, but if what you want to do is under a PD, then it shouldn’t be a problem.
Now, you may not be ready to jump in and take on a project of such a large scale, but there are other smaller development projects that might be more viable for you. For example, finding a house and converting it into two apartments. Doing something like this is almost like “title splitting”. In essence, you buy a freehold property and turn it into flats with long term leases.
Another viable possibility could be to buy a plot and build a house or several houses. You could then either let the properties out, in other words “build to rent”, or could alternatively sell them on.
Or, there are other even more exciting things you could do still.
I was chatting to another investor just a few days ago who was telling me that having bought a plot, he was now going to have a modular building placed on the land. A modular building comes “ready -made”; transported on a lorry in three or four pieces and is simply dropped onto the land, which has already been prepared in terms of the foundations and utilities. It’s rather amazing – the walls are already plastered and the carpets already in place!
So, as you can see, there really is so much that we can do under the general term of “development”, which is why this is a highly exciting (and not to mention profitable) strategy for those that want to be a little more sophisticated.
Of course, undertaking property development is somewhat more complex than doing a simple single let or buy to let, but with the population in desperate need of new housing, this could be a fantastic way to go!
Peter Jones B.Sc FRICS
By the way, I’ve rewritten and updated my best selling eBook, 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 ThePropertyTeacher.co.uk