This is a real sweet spot since these projects are more profitable and, in many ways, more straightforward than a self-build or flip, but they’re too small for the larger housebuilders to be bothered with. So it means you’ve got less competition, which is a good thing.
2. How ‘straightforward’ is a small-scale development really?
A small-scale property development project has a bigger budget compared to a flip or a refurb, and this means you can afford to hire an experienced Project Manager to oversee the work on your behalf. This is a big plus since, on smaller projects, you will invariably have to oversee everything yourself, which can be both daunting and time-consuming. This larger budget also means you can afford to appoint a main contractor rather than a jobbing builder, which gives you a larger, more reliable organisation with better systems and greater abilities.
3. What does a small-scale project look like?
While a new build can fit the bill, it’s not the easiest route precisely because you need to get planning permission first. In my opinion, a better path for a novice developer is to go for a conversion project, for example, converting an office, shop, bank, restaurant, light industrial building, etc. into apartments.
The government has recently granted comprehensive permitted development rights that allow us to change the use of these buildings (and others) to residential without needing full planning permission. It means there’s less planning risk, and because you’re dealing with an existing building, the projects are usually quicker than building from scratch. And you only have to look around your local town or city to see the countless commercial buildings that could be converted to residential using permitted development – it really is a huge opportunity currently, and many of these projects are relatively straightforward.