Property developing - am i being naive?

FATBALLZ

You are living in a dreamland. If you don't know about property development now isn't the time to get into it. These propaganda programmes proliferated the fantasy that property is a big orgy of free money for everyone. It isn't.I know a number of people who got into it just before the end of the boom and are now financially screwed.

Turnbull2000

Also bare in mind that the 'profit' is often merely a valuation. i.e. they haven't actually sold it at the price they need or want!

Snippa

Also bear in mind that while it's possible to make a profit, there is also the risk of making a huge loss. Making losses are a risk with any business you go into, but with something like property development the scale of the losses can be staggering. It's not just in the buying and selling price, but in the interest you've paid on finance, legal fees, your own time etc. Even in the overly rosy property programmes, often when you see the "profit" made it might sound great - wow, they made £20K. But when you tot up the hours spent, they were working for less than minium wage!

If the thought of losing money makes you panic, and you can't afford to lose money, don't risk it.

Nixer

The trouble with those kinds of programmes is they were in boom time when any old numpty could buy a house, not manage the renovation to time and budget, mess a few things up and still sell at a profit, although they never mentioned CGT. To make a profit these days I'd guess you have to have a good wodge of cash behind you and know how to pick and choose your projects i.e. be very experienced.

If your partner is good at fitting bathrooms and such has he considered looking into becoming a self employed plumber/bathroom fitter/handy man? You would still need some money but I don't know if there are any small business grants or loans or any sort of help. He might need to get some sort of qualification or accreditation.

JQ.

Colincbayley wrote: »

The money in any property development is not in your DIY skills.

In order to make money in property, you first need money ( Well some at least )
The profit from a development is in the buying, selling and sticking to budget. You need to be a Jack of all trades, not only plumber/builder, but also project manager, accountant, salesman, negotiator etc.

Spend some time doing plenty of research before spending even 1 penny.

( these TV development programs may well make good telly, but it is different in the real world )

Absolute nail on the head comments. Being good at property development is nothing to do with DIY, it's about being an Entrepreneur, negotiation, understanding markets, demand, supply, time management, etc.

The majority of successfull developers I know have been successfull in other businesses and transfer those skills and cash into this field. There are lots of unsuccessfull developers out there.

Blacksheep1979

you don't have a clue what you're doing and you're talking about playing with a seriously pricey gamble - this isn't a £100 match betting tester you're talking about, it's £100's of thousands and if, sorry when, you get it wrong it's not going to be funny and will mess you up for years.

jonewer

Most of the 2007 property pornsters would have made more "profit" if they'd just sat on the house for a year and done nothing to it whatsoever.

They didnt make money because of their bodged over-budget tasteless interior design forays but in spite of it.

phlash

Nixer wrote: »

The trouble with those kinds of programmes is they were in boom time when any old numpty could buy a house, not manage the renovation to time and budget, mess a few things up and still sell at a profit, although they never mentioned CGT. To make a profit these days I'd guess you have to have a good wodge of cash behind you and know how to pick and choose your projects i.e. be very experienced.

If your partner is good at fitting bathrooms and such has he considered looking into becoming a self employed plumber/bathroom fitter/handy man? You would still need some money but I don't know if there are any small business grants or loans or any sort of help. He might need to get some sort of qualification or accreditation.

They never mentioned CGT because a "buy - renovate - sell" project would not be taxed under CGT rules.

It is taxed under income tax rules as it is a trade. The point is, under these rules it is taxed more!