2 first time buyers thinking of building a house to sell. Need advice

C

cavanlad1982

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Hi,
My brother (21) and I (24) are thinking of buying a site with a view to build and sell straight away. Both of us are currently renting and have never owned a house before.

We have a good site in mind at a reasonable price. My brother is a builder and works for our father's construction company so they would obviously build the house.

I have a few questions which I am hoping people could help me with here.
As we never owned a house before, do we get any concessions such as mortgage interest relief or stamp duty given that we are building to sell?
Will this affect our first time buyers status in future when we build\buy our own primary residences in a few years time?

I have searched a few threads on this already and these are the main areas that I can see we need to think about. Are there any other taxes or costs that we should also consider?

We would look for an interest only mortgage
Auctioneers fees and solicitors fees
Pay capital gains on any profit

Thanks
 
Thanks for clarifying. Can you think of any extra costs\taxes that we haven't thought about? We are basically trying to work out the figures to see if it makes sense to go through with this idea.
 
I've never built a house before, so no, I can't really think of much.

ESB and County Council charges are usually quite significant AFAIK.
 
A lot of young lads working in the building business go down this route, and usually build decent houses because they are not as savvy as the old hands who trim costs everywhere. Some make money, others do not.

The main reason that some lads lose money on this venture is because they have no real strategy or business plan. They find a site, build a house and then try to sell it at what the whole lot cost them plus their profit. This is the wrong approach.

The people who make money at this game are the ones who analyze the market to see what demand exits in respect of house type, price and location. Rural Ireland is peppered with new houses that were built in this way and which remain unsold, mostly because they were built on the basis of gut instinct and without a plan.

Look hard at what you are doing. See if the site you have in mind is where people want to live. It may be cheap, or beautiful, but if it's in the wrong place you will have problems shifting the house. See if your figures allow you to build and sell in the price band that defines the local demand. Watch stamp duty levels and bands. Take advice from an estate agent before building anything.

And lastly, finish off the site with a tidy but basic landscaping, to show off the property at its best. Many buyers are not able to see beyond the pile of rubble and soil that surrounds many new houses; fnish it off and clean the site up well.

With some commonsense planning you can do well on this, plenty of people do it and it gets them a start in the business. Remember though that building a house and putting it on the market in rural Ireland will not automatically make you a profit. Good luck with it.

With regards to first time buyer status, if you form a company to carry out this project it should not affect your individual status, but maybe someone can clarify this issue.
 
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