Some thoughts on construction
+ What I would do right now as a start up property developer
Construction isn’t what it used to be… 16 years in and I’ve seen some big changes, and some things that will never change
Price increases on materials, some by over 200% - making it much harder to make any profit. Margins have reduced, the workload has increased & simultaneously material quality has gone DOWN
Labour prices have increased, along with fuel, insurances, Taxes and so on…
But, I still see the popularity and demand growing for a GOOD builder, I think this is mainly due to the lack of them.
We aren’t seeing as many young people coming into the game, the trades are slowly dying, I’ve had 13 apprentices & only one of them is still in the game – it’s not easy
The biggest change for me, has been the introduction of social media – Gone are the days of just being a builder, now you have to be a content creator too… which I have a love hate relationship with. It bores me, but it has also brought amazing opportunities my way & is ultimately FREE advertisement – still boring though
Perfection is the enemy of progress – The less time between thought and action, the better. You will figure it out
Looking back after many conversations, there is always stories of hard times, challenges around every corner – but that is business. If you are good at what you do, and genuinely put in your all, you will always find success
I don’t care what anyone tells me, AI cannot take over this game – Building a new build on flat land? Oh easily, but turning an 1840’s Victorian terrace into a 6 bed HMO? Nope, not a chance
So where does this leave the building game? No new boys, and hard for the old boys? I think it leaves a gap in the market – more room for the lads at the top of their game, an opportunity to fulfil demand
All of this needs to be taken into consideration when doing flip projects
The biggest barrier right now for developers is costs. It used to be purchasing, but now we’re in a buyers market, there are good deals everywhere.
It used to be that the best way to turn a profit was to take a semi detached, stick a rear extension on under PD and make it super nice inside. Those days are gone.
Construction, SDLT and holding costs. They’re all out of control.
What I would do if I was starting out right now;
Buy a terrace that needs work. Buy off-market wherever you can. Back to brick refurb it. Do as much as the work yourself, even if it takes longer. Don’t extend the footprint at all. Aim to sell to young families and design as such. Spend more money than you think on professional photos for the listing. Stage it. Try and break the ceiling price for the street but not by much.
Good luck
Ryan + Josh
