Self-building your own house can be a great way to create your dream home while also potentially making a profit. The amount of profit you can make as a self-builder varies considerably, depending if it’s a small passion project or a major investment. You’ll want to consider the quality of the build, the location of the house, and the current state of the housing market.
One of the things that appeals to people about self-building is that you have greater control over the costs involved. By taking on the project yourself, you can choose the materials and construction methods that suit your budget, rather than being subject to a contractor or the conditions of an existing building.
However, self-building isn’t for the faint-hearted – it also requires a significant amount of time and effort. From obtaining planning permission to managing the construction process, there are many steps involved, which can often be time-consuming and at times stressful. You might want to therefore weigh up any potential profit with the amount of energy you’re willing to put into the project.
When it comes to making a profit from self-building, there are several things to consider. The first is the location of the property. Generally speaking, properties in desirable locations with good transport links and amenities tend to go for more, although rural locations with stunning views can also be appealing to potential buyers.
The quality of the build is also crucial. A well-designed and well-built property will always command a higher price than a poorly constructed one. You will want to make sure that you work with highly skilled, reputable builders and architects, or if you’re doing the work yourself, that you have the relevant experience that is needed to see a project through.
Another factor that can impact the profit potential of a self-built property is the current state of the housing market. In a strong housing market where demand is high, it’s possible to achieve a higher price for your home. But, in a weaker market where there is an oversupply of properties, it may be more difficult to sell your property for the profit you want.
In terms of the potential profit margin, it’s difficult to give a precise figure as it varies so much project to project. However, a rough estimate we like to give is that you can potentially make a profit of around 10-20% of the property’s value if you self-build.
For example, if you purchase a plot of land for £300,000 and spend £600,000 on construction, the total cost of the property would be £900,000. If you were able to sell the property for £1,050,000, you would make a profit of £150,000, which represents a profit margin of around 17%. Of course, it’s important to remember that this is just a rough estimate, and the actual profit margin may be different in reality. You will also want to factor in legal fees, building regulations, and insurance, as they can all eat into your overall profit.
Despite the potential challenges and risks, self-building can be a rewarding and profitable experience for those who are willing to put in the time and energy needed. You can create a home that is completely designed for you or conceive a space that will pay itself back in heaps and bounds when it comes to the time to sell.