Why not Build a Cashflow Positive 'Build to Let'?

publication date: Apr 4, 2009
author/source: Kate Faulkner

If you are keen to make money out of buy to let and want to be sure that you buy now and gain instant equity in the future, then it's worth considering buying land and building your own property or properties which you can then be let out.

Many buy to let landlords are happy to take on renovation projects, but few look to self build to help increase their property portfolio's value. Often investors look for deals that allow them to buy properties at 30% 'below market value', however if you build to let, then your property is likely to be worth 30% more than the cost of the land and build.

In the past few years, it has been difficult to build new homes because of the competition for land, labour and materials, however, in 2009 and 2010, developers are starved of cash to invest, building has dropped from 240,000 to around 70,000. As a result land prices have fallen from between 15% to 50%, labour is readily available and material costs, although officially they haven't fallen in price, can be secured at 10% to 25% less than the published price.

What many landlords don't realise is that building to let can be quicker and easier than renovating a property. It also allows you to build the property to suit your letting needs. For example, if you were thinking about running a Home in Multiple Occupation, you can make sure that it meets the licencing laws from day one. Showers can be bought to ensure that the working parts are on the outside so that when they need maintaining, you don't have to take off tiles and can quickly and efficiently get them fixed. The property can also be built to ensure that any utility bills are kept to a minimum with sustainable building materials such as a timber frame kit and top quality insulation.

So, if you are serious about building a profitable buy to let portfolio, then make sure you consider self build as part of your plan!

To find out more about self build take a look at our Develop and Build section, read our Top 10 Tips about Building a Home and our Guide to Building a Home.  Do you have a property question you want an unbiased and independent answer to?  Contact the Designs on Property team or call us on 07585 897128.

Need help with a property problem? Have a question? Why not call Designs on Property on 07585 897128 or Contact Us via email.
Kate's Consumer Portal

FREE Buy to Let eBooks

Download a copy of our
Buy to Let Show eBooks
for FREEsimply click on
the image below

Buy to Let Show - download our Buy to Let eBook for FREE