Developing a Small Block of Apartments

darby5250

For the last while I have been looking into the idea of buying a site in the Dublin city area and developing a small block of apartments. I have never done anything like this before so I'm not really sure what steps I need to take before I decide to go ahead with the project or not.

So basically I'm just posting here to get some feed back from people with some experience in the property development market: Architects, Builders, Property Investors etc.

I would also like to get a better understanding of things like the cost of building, the planning permission process, council contribution fees and the hole development process in general.

To be honest if some asked me a year ago what comes to mind when you think of property developers I'd think NAMA and Receivership. So I'm I crazy to be even thinking about taking on a project like this?

A little info about me:
* I have savings and investments of around €170,000

* I don't have a mortgage or any type of loan to my name

* I am currently a director of a small / medium sized successful business (in business 9 years)

* I have no experience in property development

Any constructive feedback posted here or sent to me by PM would be gratefully appreciated.

Thank You in advance

newbie2013

You shoudl look into buying somewhere else and doing up as dublin prices wont get you much for 170k. Heres a block of apartments in castlebar in county mayo, a busy enough town on the west coast and im near sure its the captial of mayo. This is right on the outskirts of town( a stones throw away) and when fully completed, will gain full rental. Its right next to a school. This is only for the price of 1 but im sure youd get the whole building for 100k if you put a bid in

http://www.daft.ie/searchsale.daft?id=706060

kkelliher

darby5250 wrote: »

For the last while I have been looking into the idea of buying a site in the Dublin city area and developing a small block of apartments. I have never done anything like this before so I'm not really sure what steps I need to take before I decide to go ahead with the project or not.

So basically I'm just posting here to get some feed back from people with some experience in the property development market: Architects, Builders, Property Investors etc.

I would also like to get a better understanding of things like the cost of building, the planning permission process, council contribution fees and the hole development process in general.

To be honest if some asked me a year ago what comes to mind when you think of property developers I'd think NAMA and Receivership. So I'm I crazy to be even thinking about taking on a project like this?

A little info about me:
* I have savings and investments of around €170,000

* I don't have a mortgage or any type of loan to my name

* I am currently a director of a small / medium sized successful business (in business 9 years)

* I have no experience in property development

Any constructive feedback posted here or sent to me by PM would be gratefully appreciated.

Thank You in advance

If the celtic tiger boom taught ireland anything, it showed who should not get involved in property development and that is anyone who knows nothing about it. From someone who has being involved in the developing of over 300 in dublin in various locations, it can be complex, highly regulated and expensive and if you do not fully and clearly understand the process it will be q mistake.

mickdw

Well I'm a civil engineer with experience across large commercial builds, house construction, small scale property development and low end planning consultancy and I wouldn't take on this project right now.
Much more cost effective to but something cheap in a reasonable area and either going long term rental or refurbish and sell in 4 to 5 years.
Very important to do background checks to ensure whatever you buy is compliant with all relevant regs and certified / certifiable.

newbie2013

kkelliher wrote: »

If the celtic tiger boom taught ireland anything, it showed who should not get involved in property development and that is anyone who knows nothing about it. From someone who has being involved in the developing of over 300 in dublin in various locations, it can be complex, highly regulated and expensive and if you do not fully and clearly understand the process it will be q mistake.

Not quite true because i know quite alot of folk who hadnt a first clue about the building trade build quite a few houses and made a lot of money in the process.

kilclon

newbie2013 wrote: »

Not quite true because i know quite alot of folk who hadnt a first clue about the building trade build quite a few houses and made a lot of money in the process.

I know a few people who know nothing about gambling or horses but won a few quid at Cheltenham last year.

mickdw

newbie2013 wrote: »

Not quite true because i know quite alot of folk who hadnt a first clue about the building trade build quite a few houses and made a lot of money in the process.

In an economy where prices were rising fast and banks lending to anyone with 2 months pay cheques, you couldn't but make money. Although Dublin prices are strengthening, it's still a very different economy now. Building regulations have also changed significantly since early boom years meaning a few thousand additional cost per unit. Interest rates (if you can borrow) will also be high now. Add in the various levy and contributions required plus stamp duty together with a low sale price and it's certainly not easy money.

kkelliher

newbie2013 wrote: »

Not quite true because i know quite alot of folk who hadnt a first clue about the building trade build quite a few houses and made a lot of money in the process.

Love to see them have a go at it now......celtic tiger had alot of tiger cubs who profited on the back of an out of control high speed train. A monkey could get a loan and pay other monkeys to "develop" the site and now we are left with national debt, empty estates, poor quality builds and tighter regulations that make it impossible to let just anyone have a go

mickdw

The figures don't add up now.
A guy building a one off house of moderate scale in country could have expected up to 100k profit before tax in the boom.
Now, that same house will cost about 50k more to build than it will sell for. That is his much things have swung.

Worriedmind

OP - this is a genuine question...why?

I can see the demand for houses going up at the minute and I'm currently designing a few small scale housing devs....but who in their right mind is buying, let alone developing, apartments now?

kkelliher

Worriedmind wrote: »

demand for houses

This is the bigger issue. Demand is one thing but finance for the purchase is completely different and given the difficulty getting finance and the likely future cost of mortgage rates, its not an ideal situation to be gambling 170k

newbie2013

kilclon wrote: »

I know a few people who know nothing about gambling or horses but won a few quid at Cheltenham last year.

mickdw wrote: »

In an economy where prices were rising fast and banks lending to anyone with 2 months pay cheques, you couldn't but make money. Although Dublin prices are strengthening, it's still a very different economy now. Building regulations have also changed significantly since early boom years meaning a few thousand additional cost per unit. Interest rates (if you can borrow) will also be high now. Add in the various levy and contributions required plus stamp duty together with a low sale price and it's certainly not easy money.

kkelliher wrote: »

Love to see them have a go at it now......celtic tiger had alot of tiger cubs who profited on the back of an out of control high speed train. A monkey could get a loan and pay other monkeys to "develop" the site and now we are left with national debt, empty estates, poor quality builds and tighter regulations that make it impossible to let just anyone have a go

I was responding to the part in red above. I know its a different world out there concerning property

darby5250

Thanks everyone for all the feedback.

This would be an investment. My plan was to rent the apartments for 6 or 7 years and then possibly sell them on.

Another idea I had been thinking of was buying a rundown residential block of flats in the Dublin city area and fixing them up (mickdw also suggest this). I've been talking to a few people over the last few days and I'm thinking this idea would be a lot more economical and I imagine it would be a lot less hassle as opposed to taking on a full scale building project.

handlemaster

Darby.. go for it. History tells us not to follow the crowd
. Pre 63 units I'm Dublin could be given a look.