Plenty of Brits invest in property every single year, either as a one-off or on a systematic basis – and despite market fluctuations caused by everything from changes in demand to Brexit, it’s still a popular choice for many. However, becoming a property developer is not nearly as easy as buying another house and selling it on; it can be a very complex process. This article will share some top tips on how to navigate the property development world.
Do your research – and strategise
Before even starting to look for a location, you need to think about your strategy. Will you sell the homes on at a profit once they’re built, for example, or will you rent them out? Some property developers, meanwhile, choose to build from scratch, while others buy up existing properties and extend or renovate them in order to boost their value. Each approach has its particular advantages and budget considerations, but they vary based on where you’re based and what the market conditions are like in your area. You can start by analysing recent buying and selling trends in the area, but in the long-term it’s wise to ask a specialist for help.
Look for a property
The Internet is your friend when it comes to looking for locations in which to invest. Major consumer-facing property websites can sometimes reveal investment gems, but you shouldn’t stop there. Speaking to estate agencies in a particular area is also a smart move, while specialist property investment networks and auction houses can also provide some great leads.
No matter what market you intend to enter or what level of skill you already have, it’s quite common for the main barrier to entry in this field to be the cost. Only people with large pots of money have a completely free pick of the properties or land they choose to invest in, and that usually only comes after already building a decent portfolio.
For that reason, any cost-cutting method is worth considering. Some new property developers choose to buy a run-down or “investment required” property at a low price and then boost the value by doing it up. That is a great solution if you have limited funds but a lot of free time: that way, you can get hold of a property and then expend your energies, rather than your cash, on improving it.
Hire a team
Of course, doing a property up from scratch is easier said than done – and as a result it may be easier to hire painters, decorators and other staff to do it for you. Some property developers also choose to recruit people for other parts of the process, too, such as specialist property analysts who can trawl the markets for you and spot the type of investment you’re looking for. If you go down that route, it’s wise to consider hiring the people as fixed-term contractors so that everyone knows the scope and duration of the work. And if you’re worried about contractor pay, an umbrella company can act as an intermediary.
From picking an area to developing a strategy, there’s a lot to consider before diving headfirst into the property development world. But by thinking carefully about how you’ll approach the task and accepting some assistance as and when you need it, you too can start to build your own property portfolio and enjoy all of the benefits it can bring.