Building houses for sale is one form of real estate investment, and a great way to create extra income and build wealth over time. The property market may look complex, but as a first-time house builder you can decide exactly how much time and effort you want to put into finding the right way to invest — along with a few key things to consider about how to start a house-building business the right way.
Building houses for sale can be done by buying an inexpensive vacant plot to build on and sell for profit, or by turning an old house into a brand-new one to resell. In other words, you buy property at a low price, repair and improve it, then build houses for sale at a profit — the classic investment of buying low and selling high.
There are several ways to invest in this field: 1. invest and manage it all yourself, 2. bring in co-investors, 3. own the land and partner with a construction contractor. Which model you choose depends on your management capability and your financial capacity.
So how does building houses for sale generate income and profit from real estate, and what are the steps involved? Let’s find out in this article.
1. Research your house-building investment thoroughly
Doing plenty of research is essential before you buy land. If you build a property and cannot sell it, you stand to lose a great deal of money. That is why it matters so much to gather as much information as possible up front, to be sure your investment will pay off.
Things to consider when buying land include: choosing a good location, the site itself, zoning, the ground level and whether the plot needs filling, the direction of the sun and wind, the house design, the home-building company, and how close the plot is to public utilities. You should also look at what is already in the area if you have an idea of the kind of house you want to build. If you are not sure, look at what is popular in the neighbourhood to see what fits best.
The cost of building a house for sale
The cost of building a house for sale is a good starting point for your research, so you can get your investment budget ready.
1.1 Land price:
Compare the prices of plots suitable for building a house, and do not forget the extra fees that come with the land sale-and-purchase agreement.
1.2 Construction cost:
The cost of building materials such as cement, timber and tiles, plus labour and the various tools and equipment used throughout the construction process.
1.3 Design and interior cost:
The cost of hiring an architect or an interior designer to plan the construction and the decoration of the house. This also covers furniture and fittings for the living room, bedrooms, kitchen and bathrooms — and here is the key point that can add significant value to your home, namely installing a luxury home lift or an elderly lift so you can sell at a higher price and stand apart from ordinary houses.
1.4 Legal and permit costs:
The cost of applying for construction permits, safety certification, and the fees involved in the process of selling the house.
1.5 Loans:
If you plan to borrow money to build houses for sale, you also need to account for the interest and the fees that come with obtaining a loan or a credit line for your building investment.
1.6 Marketing and sales budget:
Advertising costs, professional photography, online sales listings, and real estate agent commissions.
1.7 Maintenance and repair costs:
The cost of repairing and maintaining the house before the sale, so it is in good condition and holds a high value.
1.8 Contingency budget:
You should keep a reserve for unexpected costs or for delays in the process of building and selling the house.
Analysing the cost of building a house for sale and comparing the prices of the materials, labour and services involved is essential — it gives you accurate figures and a solid basis for planning your investment.
2. Find a good plot of land
Next you need to find land that matches your criteria for building houses to sell. This could be a vacant plot, or, if you want land at a lower price, you might look for a distressed property to demolish. You are unlikely to find plots like this in residential or already developed neighbourhoods, though, so you will have to weigh up the costs to see what is realistic. A square-shaped plot is considered the best, because it makes laying out the building plan much easier.
To find a good plot, check these characteristics of the land
2.1 Check where the land came from
2.2 Check the characteristics of the land
2.3 Check what surrounds the land
2.4 Check the orientation of the land
2.5 Check that the plot was never a public right of way
3. Start building the house
Once you have bought the land, you can start building. You should have your construction strategy ready before you decide to buy, so you can be sure no time is wasted. Construction is the riskiest part of the entire project and the stage where the most can go wrong, so it is essential to hire a strong team to make sure everything goes to plan. That includes a general contractor, an architect, inspectors and specialists such as plumbers, electricians and technicians, as well as your lender, to be sure you have the funds to carry the project through to completion.
The construction stages are as follows
3.1 Prepare the site
3.2 Set out the building layout
3.3 Pile boring work
3.4 Foundation work and ground-floor structure
3.5 Upper-floor structure, roof frame and sanitary system installation
3.6 Roofing, staircase structure and casting of the various components
3.7 Building the walls, installation work and preparation of the electrical and plumbing systems
3.8 Wall plastering and ceiling installation
3.9 Door and window installation, along with floor and wall finishes and built-in work
3.10 Cleaning and final inspection
4. Market the house to find a buyer
Once the house is finished and has passed inspection, it is time to find a buyer. If you want to sell as quickly as possible, consider hiring an agent. Before construction is complete, you should get in touch with local agents and real estate specialists.
Beyond agents, online marketing matters enormously today — for example, having a website that is easy to use and gives honest, complete information. A good website is like investing in the property itself. You can also buy advertising across social media, making sure the location of the house is stated clearly, as well as generating leads, running ads and using promotions to attract interest.
5. Close the sale at a profit
Closing the sale is one of the final and most important steps in the business of building houses for sale. Once you have found the right buyer, it is time to close the deal and reap the rewards of all your hard work. Whichever route you take, signing the contract and finally handing over the keys is a deeply satisfying feeling.
Whether or not you use a property agent, you should know exactly what is involved in buying and selling a house. Building and selling houses carries more risk and demands more expertise.
What goes into a house sale contract
At the sale-and-purchase agreement stage, the points that must be stated clearly in the contract are:
5.1 The buyer’s and seller’s details must be correct
5.2 Details of the property, such as the title deed number
5.3 An agreement on who pays the costs on transfer day at the Land Department: transfer fees, mortgage registration fees, stamp duty, specific business tax, income tax and so on
5.4 The agreement on the deposit
5.5 The handover period, normally around 1 month
5.6 Other conditions in the contract
5.7 Conditions for breach of contract
5.8 Every page and the end of the contract must be signed, and there must be 2 copies
Sample house sale contracts
You can download or view detailed samples on various websites, such as:
- House Sale-and-Purchase Agreements: What Do You Need to Know? [All of It in 5 Minutes] from ghbank.co.th
- What Is a House Sale Contract? 5 Details to Get Clear Before You Lose Out from balanceniti.com
- Sale-and-Purchase Agreement for a House with Land from lk-capital.com
- What You Should Know About Property Sale-and-Purchase Agreements from klungbaan.com
All that said, consulting a lawyer or a real estate specialist will certainly make your house sale contract go far more smoothly.
In summary: is building houses for sale worth it?
You always have to weigh the risks before building a house to sell for profit. Be aware of some of the risks so you can make an informed decision — building houses for sale can bring enormous profits, but it can bring heavy losses just as easily. As we all know, every kind of investment carries risk: not just your money, but your time as well.
Want more information on installing a lift to add value to your home?
At Cibes Lift, we are a home lift company with deep expertise in home lifts, with more than 79 years in business and luxury home lifts installed around the world. So you can be confident that this is the feature you have been looking for — one that makes your home more luxurious and raises its value. You can contact us at:
- Phone (Sales) : 02-114-6499
- Phone (24-hour after-sales service) : 02-114-6998
- Email : support_th@cibeslift.com
