Sarah revisits Ross-on-Wye in April 2008 - and Gareth the record producer-turned-developer is now Gareth the part time estate agent.
Successful developing is all about being first in line when those good deals come on the market. And using his insider agency knowledge, Gareth has snapped up what he thinks is a gold plated opportunity.
Before he started ripping it to pieces, it was an unremarkable two bedroom bungalow, but just like project number one, it’s got the same potential. And that’s because it’s got the same Ross-on-Wye hillside, and the same views to die for.
Gareth bought the property for £245,000, has a budget of £140,000 to replace the old bungalow with a larger, newer model, and hopes to sell for £500,000, making £115,000 profit. It sounds like good business, as long as he can turn the project around quickly, because the market here is haemorrhaging about two per cent a month.
Gareth’s working to a challenging four month schedule. He’s off to a quick start with the demolition, but two months later some of the shine has rubbed off this development and the schedule has fallen way behind. By now, the shell should be finished, but Gareth’s still on the interior block work.
Spring turns into summer and, with the market falling all the time, a further 14 weeks pass in ghostly silence. So it comes as quite a surprise when Gareth asks to meet Sarah in a local pub and explains that he's sold the property, unfinished.
| Bought for: | £245,000 |
| Ground work and demolition: | £50,000 |
| Sold for: | £335,000 |
| TOTAL PROFIT: | £40,000 |
Given that prices in the area have dropped by 20 per cent, this 13 per cent return is not bad at all.
It isn’t easy to make a profit from an unfinished project. Gareth was canny enough to buy this development and then get planning permission for a bigger dwelling, and that’s a great way to add value. The bottom line is that Gareth made money when the market was rising, and made money when it’s falling. His sites may not run like clockwork, but he’s proved that, as a developer, he can stay the course.
But Gareth doesn't want to be a developer any more; he doesn't enjoy the project management. And in this market, unless you love the job like crazy, are prepared to work really hard, and give it your all, there are far easier ways to make a living.
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