Self build does not mean you have to build a home yourself, but you are organizing a one off build to your specification to be built for you. You may get a project manager to supervise it, a major contractor to handle most and keep an eye on the rest of the sub contractors, or if you want you can organize things yourself. It can be a standardish box, or a work of art, or anything in between.
A lot of this page is about the finical viability of self build, however if your reason is to get a better home than you could conventionally afford or just to be able to afford a home then this is valid as one day you may want to sell it and use the proceeds to move on up the property ladder.
The advantages are in being able to have the exact design and location of your choice and being able usually to get it at something around 40% less than the comparable home by other means. The saving comes about by taking the developers margin, getting the job run as efficiently as possible and by getting back most of the VAT. As long as you have built it for your own occupation and it has been for a period your own main home, then when you sell it there is no tax to pay on the profit, which can be considerable. Many double in value or better.
Statistics and claims vary as to how many are involved, and how much each has made. But there are thought to be between 15,000 and 20,000 self build homes build per year. Often you see it stated that people saved 80% or even more of the cost. This is misleading as although the amount they paid for the property against the final valuation may show that the costs were say 40%, time has elapsed and some of the profit has come from prices rising rapidly on all property in the area, and had they purchased a completed home they would have had this element of the rise in value. The amount people save can vary from 25% to 60%, but probably around 40% would be the norm if well organized. Like many things in life, experience allows you to become more effective, so f going it alone, your first project might be quite bit lower than this, the second better and third show a saving of around 40%, through the club utilizing the work books, help and experience you should be able to jump over this learning curve to make a 40% or grater saving on all your projects. A series of developments of course would mean that you would be likely to be earning far more from this, tax free than from your combined full time salaries, and after a couple of moves are living mortgage free and feeling very comfortably off, as you no longer have any mortgage or rent to pay.
Many people who self build, rather than reducing their spend, instead decide to have a far better, or larger house, at the same mortgage as they would have been able to have had they purchased a developer home. Often the finish will also be better, as you naturally take more interest in your own home, and as either you or your manager has been watching every step, some poorer practices will not have slipped by.
Up until the last few years, few who were involved in self build, were primarily interested in creating wealth, most as looking at moving up the property ladder by this means, or getting a better home, ideal for them. We are going to look primarily at self build, but also investigate as many objectives as we can.
If creating wealth is a major factor, and perhaps you have in mind becoming a serial self builder, then you will need to pay particular attention to choosing locations, to budgeting and cost control and maximizing return in other ways such as in finding new plots, or multiple plots through the club, or where you can market some plots to others. The speed at which the project runs also varies from one project to another and you will have to plan time as well as expense. If you know you are going to undertake a project in the future and have access to the right site, purchasing this as early as possible is likely to be a wise decision, as it is the site rather than the construction cost, that will rise when all prices go up nearby. Likewise if you have the chance of two plots at a discount, you may find holding one spare, if you can afford it, is a very good investment, and also allows you eventually to repeat the build and move next door taking the profit.
Some may be put off serial self building, due to the time it takes, but realistically the time it takes is no longer than many property developers will take in identifying a suitable property, and making changes that involve a lot more risk for far smaller rewards and far less job satisfaction. There is no reason why serial self building cannot be a part of an overall financial objective, or mixed with property development, or other business areas.
Similarly some may be put off by the idea that they have to live in each property for a period or pay a lot of tax on the proceeds, however if instead they choose never to sell, but to let, then no tax on the appreciation of the property becomes payable, unless they decide to sell the property. The rent however would be equivalent to a property costing far more, and able to support a mortgage for the full value of the property, allowing a buy to let mortgage to be used and profit released, tax free, for the foreseeable future. If used as a part of a geared buy to let project, then this can drastically speed up the multiplication of wealth. If buy to let is new to you then see the articles section of visit the Property Pension Clubs website
Like all property, it has to be suitable for the market it is aimed at, and will probably be capped in price by similar properties in the area. Therefore if you decide on a plot or plots in an existing development or to replace another property, the sale value of your new build has to be fully investigated. Likewise there has to be both a market for your property and people with the ability to buy it, who wish to live in the chosen area. All of this and more should be carefully considered and especially before deciding to build a larger house. Even something that to you may seem unimportant like needing to pass through an area containing council built housing to get to the property, even if some way away, may drastically cap its price potential.
In this series we are going to look at many aspects, the ground we cover will give you the same preparation, as you would have got, had you spent thousands and gone on a course. In addition in the articles section, we are looking at specific build aspects, so that you can, if you wish, better understand specific features or techniques. At each point we are giving you the knowledge to manage, or define what you want, we do not attempt to teach you DIY trade skills. Most people, who have no history within the building trade who get involved hands on in developments, probably waste or spend far more than they save, and in the case of a house that you may hope to sell, it may be far more difficult to sell if the standard of work cannot be presented as completely competently done. Undertaking work yourself that slows down the developer may also cost you far more than can be saved. laboring for the craftsmen you employ creates an unusual position wher you are both master and slave and can lead to a lot of conflict developing.
This section will be equally applicable to anyone who is to become involved in self build either to get a property at an affordable price where they cannot get one otherwise, or for those who want the advantage of a nicer or larger home on the same budget, or as an investment.
About 85% off the population say they would like to have a self built or personally designed home, and although more are, it only accounts for between 15,000 and 20,000 each year, about 1 in 10 of new builds. many people just don't understand it, others lack confidence and others are mislead into believing that while many others can do this the option is not open to them.
The major reason why more do not become involved is just that the process appears more difficult than going along to a developer and buying an 'off the shelf' home.
So what can we do to help make it simpler and easier for you,
Working with the club it is likely that we will be able to help you save many times the membership fee as well as allowing your dream to become a reality far quicker.
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Self Build Homes Club is an international club
and trading title of Self
Build Homes Club llc. Local services
to serve members are commissioned for the club by New
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