|
|
|
Self Build
Introduction to self buildTo many the idea of self build brings up the image of living in a caravan on site up to your knees in mud for several years of hard labour. However a great many people are involved in self build and either just manage the build project or in many cases use a project manager to do this for them. Self build allows a margin of between 15% and 65% compared with buying a similar property in the same location, typically 40%. The other reason many choose self build is to get extra quality, and the design of their choice. Rather than make a saving, many choose to have a larger home for the same budget as they could get elsewhere, or one that is better finished. Lets start by getting rid of one myth, most people cannot make any positive impact on profitability by being involved in the build, if you are not a craftsmen in the building trade, you will just slow everything down and create problems for others. As time is money, most who get involved in the build hands on, actually increase the cost by far more than the savings of cost they have generated by their labor. Money is made in the management of a build, getting the right people onsite at the right time, keeping materials flowing so they are available when required but not in the way weeks ahead, in buying and selecting the most profitable materials and other items to include. You may have heard of people acting as the laborer on their own build, a really silly practice, how can you be the boss and the slave of craftsmen at the same time. Forget the thoughts about team working, its a case of good, positive management pays dividends and no management looses a lot of the margin available. Not that you could actually loose money unless you were really completely incompetent. If you think you might not get the most out of this then use a project manager to do it for you, or look for other help. So if you use a club service and a projects manager, most of the perceived problems have gone away. However there is one thing that is different from any other activity in property and that is that there are usually a lot of decisions to make, but luckily this is made far easier where you have support. In reality anyone can become involved in 'Build to Let' and make a profit, and its safer and far easier to show large returns than in buy to let. Although you may at first consider a property purchase for a pension to be an investment operation only, becoming involved in a self build, providing the project can be properly managed, with a deal put together well with fixed price quotes in advance etc, allows you to get good properties at a substantial discount, that will often get a premium on the rental market. Using a special short term mortgage while the build occurs and re-mortgaging based on the higher value when completed can produce very high gearing, sometimes in excess of 100% of the cost. So what does self build, or build to let offer you
I have started the list, but I am sure if you think about it you can at least double it in length. So build to let is better, safer, more profitable and in every way better for you than buy to let, so why you may ask is only 1 in 10 at most buy to let investors even looking at build to let. Its the perceived difficulties, and lack of understanding, however few of the problems people imagine are holding factors should present them with any real problems. Lets talk about plots for a moment. Ok plots are for some a problem to get, and it takes a while to find the right one, so what, buying property for buy to let also takes time, and finding an existing property that is in both the location and style is more difficult than just liking the place and choosing your own design. For the build to let investors this is clearly less of a problem than the self builder looking for their dream home. SBHC (more on them below) tell us that at any time they know of over 14,000 sites with pots available, so you may wonder where all the stories of self builders spending all available hours for 8 or 10 years to find a plot came from. It is to do with what is required and how plots generally come up, well over half the 14,000 sites they tell us have 5 plots or more on them. You see the lone self builder is looking for the rare item a single lone plot. Using a club approach and putting several members together you can use larger sites with more plots on, as there are far more of these, and therefore the competition is smaller the cost is lower too. Another bi product of developing as a group on a site is that many costs, from portaloos to secure storage is also shared, and a project manager can often look after the whole development for everyone. The SBHC have local consultants and groups, new ones springing up everywhere, and a proactive policy of looking for land that could become new plots, as well as stirring up new projects and interest. There are some other clubs for self builders but most are open to 'people like them' and may not be friendly towards those of us only interested in property to create a pension or wealth and not excited about the latest loo or gizzmo. SBHC likes to have mixed projects, and can often open up even more opportunities for us, with all sorts of joint venture opportunities as well. So lets look at the SBHC, Self Build Homes Club llc, they are an international club, the company is registered in the USA and head office in New York, but they have a lot of UK specific help, a number of websites devoted to the UK, local consultants and operate under the same commissioning structure that we have moved to, which uses a commissioning company to find, commission and supervise services rather than needing to employ people to do it ourselves. They like us and many other clubs that help to improve people lives were sponsored and helped to get going by New Atlantis, so have a sort of common way of looking at things, like requiring reliability, considering members interests to come first and not selling out and taking commissions from others to influence our members. They also have administration and subscription services handled for them as we do through Club Services, so the look and feel of being a member of either club is very similar, and the international nature of the SBHC is not really noticeable until you want to go and build your holiday home in another country. We are now working with a number of other clubs, amongst these is the Self Build Homes Club. This club provides loads of help for members, theirs and ours, who want to become involved from work books helping you to get to know what it is you want to do, to finding you a plot to helping you in loads of other ways. It even has loads of standard forms, contracts, and letters as well as a planning and monitoring kit to simplify keeping control of the project. Local consultants make this all happen and solve problems, as well as hold your hand and guide you. They don't make decisions for you but tell you of the options and where to get information to allow you to decide. So why, you might ask, as we already had a series of services to help our members, have we decided to scrap ours and join in a joint deal. Well what they could offer was so far beyond what we could, that it made sense to get their services available to our members as well. So although currently a very very small percentage of those in 'buy to let', move on to 'build to let', although its loads more profitable and allows far faster growth, and most believe its too difficult, would take to long, that they would not be able to get plots or just think its all too complicated, when none of these are true. However it is true that to do it on your own is while possible, extremely difficult, and nothing like as profitable as doing it with others. The Self Build Homes Club have a number of websites devoted to self build in the UK, including a very small introduction to self build site at www.public.self-build.org.uk and a door entry to this and other systems at www.self-build.org.uk . They also have a large site completely devoted to self build in the UK for people in the UK, at www.public.self-build-homes-club.co.uk and a door into this and others at www.self-build-homes-club.co.uk, their main international site is at www.selfbuildhomesclub.com. As to which club you should join, that's a personal choice, if your interest is principally in build to let or self build then joining the SBHC makes sense, if its principally about using property to fund a pension then joining us is the best route. As members of both clubs can now draw on the services of each other and others, you can get at the same range of services. One of the changes we had to make was to add a range of membership types that lined up, to allow this to happen and there is no cost difference between them. The only advantage of joining one club over another at the moment is that you get direct contact rather than through the other club. In the longer term we may be a bit more expensive as we may have to add VAT to our membership fees. The only thing at present our members do not get is the trade discount card they offer their members as it is in effect their membership card. So what is holding you back now, we would suggest absolutely nothing. Articles In this section we are going to generally disregard if the property is for you, to let short term and then for your children or to build a pension plan with. The majority of the articles are therefore just as valid for anyone interested in self build, or build to let. we have limited our articles to explaining what self build is, and how it relates to making more income or wealth, and not the 'how to build' or detail on self build which is covered within the Self Build Homes Club website An introduction to self build by the Self Build Homes Club What if house prices fell (SBHC article) (more to follow) Club services relating to self build
All our own self build services have been discontinued, we have instead done a deal with the Self Build Homes Club and our member now get to use their services, at no additional cost. They have a compatible membership type grading system to us, and so should present no problems to members. Members who were a member of this club prior to the new types being introduced are copper members under the new type system. While there is no copper type in the SBHC, we can arrange for you to use SBHC services as if you were a gold member. New members now who join as copper members cannot use the SBHC services without upgrading to another type. Members who feel that in the longer term that the SBHC would be better for them, can transfer without paying a joining fee and this includes copper member who were members prior to the announcement of the new grades. On transfer subscriptions just continue then to SBHC at there current rates for the type. We have no objection to members doing this, we are here to get the best service we can for members. It also works the other way, you could join the SBHC first and in a few years transfer to us in a similar way, if its our services you then think you will be using more.. To find out more on the services available through the SBHC click here.
|
|