Builders know that by acting as their own general contractor, building their own home and living in the home, they earn instant equity in their home. Building and selling is one way to invest in property. By living in the home for a brief while, building another home and then selling the original, they can make even more money. There is an old saying among builders that “the third one’s free.” This means that, in a good real estate market, the equity that the builder makes with the sale of each home enables him to build the third home using the proceeds from the prior sales.
Contractors usually make about twenty percent of the total sales price of a home. This money can easily be transferred to an investor who acts as his or her own general contractor. Contracting a home to build is not easy, but it can save an investor homeowner quite a bit of money. There are many things to know about contracting a home, but there are also courses that one can take to learn about building a home.
Prior to building your home for investment, you need to purchase land on which to build the home. In today’s depressed real estate market, land can also be had for bargain prices. Because the real estate market is at a standstill in many areas, landowners and developers are beginning to sell building lots off to individuals.
In addition to lots being sold at a good value, construction labor is available, as are trades people. When the real estate market falls into a slump, it affects many businesses and individuals, especially in the trades. Many trades people and builders are eager for work. This can be an advantage to a person who wants to act as their own general contractor. In addition to being able to get land at good prices, an individual contractor will also be able to get good prices on labor and materials to build the house.
Acting as your own general contractor can be an exciting and fun way to invest in real estate. There is no such thing as a sure thing when it comes to investing, but building and selling is one of the safest ways to make money while investing in property.