Is it profitable to build to sell?

lightspeed

Hi

I'm wondering is it possible to buy a site with intention to build a house for sale?

I'm looking in Dublin area and would need bridging loan and probably would take a few years to save up enough capital to even secure such a loan

However, if you could all just humour me for now.

For example, I see below priced at €150,000 for site in Swords with planning permission. It's for 3 bed semi detached at 104m2/ 1119 Sq.ft.

From googling, I'm thinking I'd be looking at €2500 per sqm to hire a builder to do all start to finish.

So 104 x €250,000 comes to €260,000. So that plus above 150k comes to €410,000.

However, if I look up houses sold in same estate I see there was a house sold for €405,000 in May 2023.

Our my figures at €2500 way off or are they realistic?

Would a new build individual house sell for much more than older houses in same area?

Check out this property I found using Daft

https://www.daft.ie/for-sale/site-12-forest-court-swords-co-dublin/5431782

listermint

2500 per sq meter in this market...

lightspeed

https://www.boards.ie/discussion/comment/121652705#Comment_121652705

Thanks, so probably fair to say my rough estimate above is broadly accurate.

I suppose the question of whether a new build would attract a much higher price or not. I would presume the 30k grant for first time buyers might enable a new build to be priced at least 30k above the recent sale example of second hand home sold for €405k.

listermint

https://www.boards.ie/discussion/comment/121653398#Comment_121653398

No, I'm only seeing 3000 plus per sqm. Dublin mad altogether.

You won't be making any profit flipping houses in this manner as an amatuer tbh. I'd put your money elsewhere

rob316

As an amateur at this game you will lose money. If you managed to make 10%, it will take up so much of your time and cause you so much stress it isnt worth it.

Deub

https://www.boards.ie/discussion/comment/121653398#Comment_121653398

And then you can add all the extra cost (EA, solicitor, etc). By your calculation, it could be 25k , you could end up with potential 10k (being optimistic here), do you want to work for almost 2 years with a lot of stress that anything unplanned brings you in the red, for 10k?

lightspeed

https://www.boards.ie/discussion/comment/121653479#Comment_121653479

Seems mad that it is more expensive to build new build than buy an already existing house. I understand build costs have inflated but I would have thought sale prices would go up to compensate. I know house prices have risen but doesn't seem like enough to compensate for build costs at least not for one off house builds from what in hearing.

listermint

https://www.boards.ie/discussion/comment/121653577#Comment_121653577

Sale prices are up though. Equally try to renovate one of the cheaper ones and see what quotes come out... 😉

lightspeed

https://www.boards.ie/discussion/comment/121653612#Comment_121653612

I've watched that show homes home under the hammer which is based on refurbishing houses in UK. From doing some research, I'm not sure it's profitable in UK in most parts.

I know the vacant homes grant exists if you want to build to rent it out for 10 years but trouble to me is that most derelict homes are very rural so consistent decent rental returned say is far from certain.

Just to clarify would that figure of €3000 /sqm be for high end finish ?

If you just wanted to do the bare minimum to meet modern regulations, for Dublin would you still be looking at €3000 sqm?

listermint

Standard houses, thats if you can get a builder. You should 1 million percent leave this to people who have a grasp over the construction industry costs and contacts within it. You'll be at a loss unless you owned a house and the corner bit of land at the side your on to a lose lose.

Donegal1234

https://www.boards.ie/discussion/2058332628/is-it-profitable-to-build-to-sell

You have to factor in costs to buy site. Stamp duty is 7.5% so thats 11250. Plus add in solicitor costs.

Also you need to pay DCC planning fees before you start. Will will be minimum a few thousand.

You will also need engineer/architect to supervise build be another few thousand.