Building spec homes can be extremely profitable, not to mention very exciting! There is no experience like watching empty lots turn into a world class luxury properties developed by you personally.It’s an amazing process and very satisfying to know that your vision came to life and forever changed the landscape.
How To Start The Process
Now for the tough part. How in the hell do I get started? This crucial step can be a beast and get very complicated, especially if you do not have the industry experience and expertise that provide the skills you will need to get your project underway.Each project is unique and almost always presents new challenges and obstacles.The process always starts with purchasing a lot and hiring an architect to design your home.
Think Conservative And Use Mass Appeal In Your Design
Always have your buyer in mind when designing your custom spec home.You will maximize the potential number of buyers and increase your profits by following this rule.
If the area you are considering building your home reveals that most homes are selling for $800,000 for a 5 bedroom, 4 bathroom, 4,200 square foot residence with a 4 car garage on a 20,000 square foot lot, that is what you should stick to building. Why? For a several of reasons.
First, you’ve already determined this is a rock solid market. An comparative analysis has shown what most home buyers preferences are as far as property features and overall budget.The greater the number of potential buyers the more offers you’re likely to receive and the higher the final selling price!
Second, home buyer’s lenders must get an appraisal from there lender to guarantee the loan amount. Lenders feel more comfortable about a home that isn’t out of the ordinary. They are looking for conformity and features that have mass appeal and are highly functional.
Last And Definitely Not Least….THE LOT!!
The lot is the most crucial aspect of your overall property value and final sales price.The sold saying goes “location..location..location”.Finding the perfect lot at the right price can make or break your spec home project.
Bringing It All Together
Now for a quick overview and analysis. Lets say you oversee the project personally, eliminating the extra expense hiring a general contractor. You bring in subcontractors and divide up all phases of the home construction.By purchasing a lot below market value and eliminating the overhead and markup of hiring a builder directly you can then expect to make a very good profit once you home hits the market.Building spec homes is big business and big profits but you have to be willing to do your homework and have patience and persistence.
- Published in Business