Building a house for profit is a task that requires some very important details. This is not something that should be done on a whim without planning for an abundance of scenarios. But building a house for profit can be very rewarding both financially and emotionally.
Items you will need
- Budget plan
- Good contractors
- Definitive time lines
Create a budget plan: Before doing anything else that might influence your decision and current capability, design your budget. Only you can determine the level of risk that you are willing take. When you go to the bank to obtain your construction loan, they will ask for your cost schedule. This is a breakdown of every factor that involves an expense over the course of the home construction.
Assemble your team: This part is key. If building homes is not what you do each and every day, you will need a really good team to help guide you when needed. Your team will consist of the your personal banker (helps with budget changes), contractor (he or she will be making things happen, setting schedules, and assuring the quality of work), and sales help (you want to have the home sold and ready to close at the homes completion date).
Choose your location: Location is the number one key in real estate. You don't have to select the most expensive property to build the home on, but if you want to sell in a reasonable amount of time, it needs to be desirable in some form. Understand crime rates, school desirability, tax rates, community activities, and anything else that is desirable knowledge for someone about to make a large investment with you.
Create your plan/blueprint: Remember that you are not designing your dream home. You are designing a home to sell quickly. Your home must appeal to the masses, not to a niche. Find out which homes in the area are selling the best---bedroom counts, kitchen design, and master bedroom / bathroom design. These factors are universally important for selling quickly.
Set milestone dates: Create milestone dates before you start, and set the expectation with your contractor that they must be met. When you set this in advance, you will be on the right path to hitting the target. Key home-building dates are the dates to pour the foundation, frame the home, drywall the home, and complete the home.
Don't try to undercut your budget. Always leave wiggle room in your budget and schedule for if and when something goes wrong. Have a good understanding of your team members' strengths and weaknesses BEFORE they become team members. Limit as many external obstacles as possible. Designing a home with broad social appeal at the right price point will allow it to sell quickly.