I Am A Property Developer – Ask Me Anything!
by Tony
I run a small property development business in the Reading, Wokingham and South Oxon and Bucks areas.
The company organises planning applications on small sites of up to 4 flats or houses, then secures the financing, oversees the design and specification, and commissions and project-manages sub-contractors to do the actual construction. I also undertake whole-house property renovations and act as landlord when I rent out existing detached houses on sites where I am assembling additional land or sorting out access and planning issues.
My tenancies are usually graduate houseshares/HMOs as I find these give a more reliable income stream than renting to a family.
I moved into property development from being a BTL landlord as I felt the returns would be better – perhaps not the wisest of careers moves in 2007!
I am inviting Property118 contributors to “ask me anything” as regards small-scale property development if they are considering this as an additional aspect or future evolution of their rental business.
I don’t claim to be able to answer everything as property development is a very wide-ranging field and can be highly specific as regards local valuations and planning rules, but I will endeavour to help.
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Member Since January 2011 - Comments: 12193 - Articles: 1395
10:45 AM, 4th February 2014, About 12 years ago
Reply to the comment left by “shakeel ahmad” at “04/02/2014 – 10:42“:
To whom is your comment addressed please?
.
Member Since July 2013 - Comments: 303
11:17 AM, 4th February 2014, About 12 years ago
Sorry, my comments relates to Tony Atkins.
Member Since July 2013 - Comments: 463
11:39 AM, 4th February 2014, About 12 years ago
Reply to the comment left by “shakeel ahmad” at “04/02/2014 – 11:17“:
Hello Shakeel – I don’t raise money overseas, and can’t comment on this. Please check which post you are referring to as I’ve never mentioned overseas funding.
Member Since July 2013 - Comments: 303
11:57 AM, 4th February 2014, About 12 years ago
@Tony. Apology
I missed the “,” and the spelling of oversees.instead of overseas.
Must make an appointment with the optician.
Member Since January 2011 - Comments: 12193 - Articles: 1395
12:03 PM, 4th February 2014, About 12 years ago
Reply to the comment left by “shakeel ahmad” at “04/02/2014 – 11:57“:
Hi Shakeel
It may just be me having a grey moment but what exactly was your question meant to ask?
.
Member Since July 2013 - Comments: 303
12:10 PM, 4th February 2014, About 12 years ago
My questions are as per my posting at 10.42.
Regards
Member Since February 2014 - Comments: 12
6:52 PM, 7th February 2014, About 12 years ago
I was going to ask Dr Watson if Mr Holmes is available to decipher what the last string of comments and questions was all about – but then I suspect he has more pressing mysteries to solve.
Member Since February 2014 - Comments: 12
6:53 PM, 7th February 2014, About 12 years ago
Before asking more questions, I’d like to state something that I should have mentioned earlier. That is that I am posting under a pseudonym. It’s no big deal, but I just wanted to be clear on this.
My sincere gratitude to those who take the time to answer questions, and my respect for their knowledge remains unaffected.
Member Since February 2014 - Comments: 12
7:09 PM, 7th February 2014, About 12 years ago
With that out of the way, I would like to pose a few more questions. Apologies for any typos / errors.
1) In the context of land / property development can anyone explain what an ‘option buyout’ is?
2) Architects drawings – The elevations in the ‘proposed drawings’; is there a prescribed perspective that they must or should be shown from? e.g. At eye-level from street level?
I ask because I wonder some planning applicants use different perspectives of proposed extensions in their drawings that are submitted to planning authorities in order to make the proposed scheme look more favourable?
3) ‘Margin on cost’ – forgive me, but what does this mean?
4) What is the standard measurement / barometer of profitability of a proposed development? My understanding is that the standard barometer is margin on sale price. e.g.
GDV = £500,000
*Costs = £400,000
Gross profit = £100,000
Therefore, I would think of this project as delivering a 20% profit, and in discussions would refer to the 20%. However, I have also heard people discussing ‘margin on cost’ and ignoring my measurement of profitability.
I’m aware that there are different ways of measuring profit however I’m trying to establish if there is a default or industry standard measurement.
5) Floor plan measurements. Is there an industry standard (RICS??) way of measuring floor space and is anyone aware of any widely used / free / paid for apps or software that is used to create floor plans?
Member Since February 2014 - Comments: 12
7:21 PM, 7th February 2014, About 12 years ago
Reply to the comment left by “Josh Taylor” at “07/02/2014 – 19:09“:
6) Do most property auction houses allow purchase options or ‘EDC’ (Exchange with Delayed Completion) contracts to be entered into auctions?