Property development –we all have seen it being done with ease and professionalism on our television screens, but is it ‘Really’ that easy?
Maybe or maybe not!
Firstly, you have to answer the following questions to reach the endpoint.
- Will being a property developer suit me?
- If it will, how to become a property developer?
In this article, we will help you find out the answer to these. Developing a site brings with it a certain satisfaction to the developers as it can also bring financial rewards in both the long and short term. Before we dig into the nuts and bolts of how to become a property developer in the UK, let’s first go over what becoming a property developer involves.
Role of a property developer
The dictionary meaning of a property developer is precise: someone who makes a living from building a new property or renovating existing homes and then sells on for a profit. Simple enough!
Despite the doom and gloom in the broadcasting about the state of the property market, the fact is that ‘the country still needs more housing.’ A lot more! Whether this comes in the form of new-build homes, houses converted into flats, or simply making better use of existing space is largely irrelevant. What matters is that people have places to live. All this means that becoming a property developer can be extremely gratifying, both financially and emotionally.
The other advantage is that pretty much anyone can develop the property. Sure, there’s a barrier to entry for some who may have financial issues, but in terms of formal qualifications and training, nothing is stopping you.
Well, now you are so close to understanding whether becoming a property developer suits you or not?
While there may not be any specific qualifications needed for property development, you’d be wise to put yourself to the test before beginning your journey as a property developer. Some key things to ask first include:
- How’s your financial condition?
- Can you communicate well with different types of people?
- Can you handle the pressure?
- Are you business-minded?
- How risk-averse are you?
Be honest when answering these questions, as it may come back to bite you later.
Now let’s move forward and explore ways to be the number ONE property developer in the UK.
Choose your route
Think in your mind what sort of property developer you want to be. You don’t have to stick with your decision forever, but it is useful to know the depth of the sea. For say, ask yourself what you want to get out of your first project? Will you sell the final property for a profit or rent it out? Or you are planning to refurbish an existing property, totally transform an empty studio, or start renovating a building from scratch.
A plan is must
Once you’re ready to begin, it’s time to think about your business plan. Even if you’re developing a property on the side of your regular job, you still need to look at this as any other new business. Don’t wait; click here to start your bridging loan application with Finspace – a leading financial brokerage firm in the UK. Your plan should be goal-oriented, with specific breakdowns of finances, costs, and potential income. It should reflect your knowledge of the industry and your research into the real estate sector.
There are several financing options open to property developers, from mortgages to bridging loans. Which one you opt for will depend on your conditions and the type of property you buy. Often if a property is run down and has little value, you might find it harder to get a mortgage that would cover the renovation costs. A short-term bridging loan could help you in this situation.
Other options include remortgaging your current home. Most of these funding options do come with risks and if payments are not kept up properties could be detained. Choose wisely!
Know your competitors and markets
Some areas are top-notch for property developers. For example, some places benefit from cheap homes and land but enjoy a thriving rental market thanks to the locality of a nearby institution like a hospital or university.
When on the hunt, it’s also worth looking at local planning rules. One of the big costs often forgotten about when redeveloping a property is a project can shut down when an application is rejected.
Value is key to property development
This means finding the right property to develop.
Look for things like unused loft spaces that could be bedrooms, large gardens that can be sold off, empty outbuildings, or whether the building could be split into flats. Then make sure you get the right people to do the right job. All together give you success.
Remember, this is not your home; it’s a property. Set this standard as your mantra. Develop a property that is right for the people, market, not to your taste. For funding solutions, the Finspace group is at your service. From mortgages to short-term bridging loans, we are providing all these services to our clients.