Does the concept of working in the property sector appeal to you? Do you love the idea of building a property portfolio but aren’t sure where to start? Starting a business in property development is like launching any business, it’s hard to succeed and can take a fair amount of time to do so. There’s fantastic potential for success, but in order to have any chance of actually succeeding, it’s vital that you have a strong understanding of building success in the industry.
The fact is that the property sector is set to rise by 25% in the next five years, which means that right now it is a fantastic time to invest in property. If you are keen to launch a property development business, now is the perfect time to do so. Of course, if you are going to start a property development business, naturally you want to ensure that everything goes according to plan and you are able to make a go of things as a property developer.
Choose whether to buy-to-let or buy-to-sell
The first step that you need to take is to determine which route you want to go down when it comes to making money from property development. There are two options to choose from; these are buying property to let or buying property to sell it, the one that you opt for will depend on what your personal preference is, and what your goals are for your business. If you want to make big money fast, then opting for a buy-to-let property (or properties) may not be for you, as renting out property takes longer to bring in a good profit.
Buying and selling property offers a much quicker profit because as soon as the property has been revamped and redecorated, it can then be sold on for a higher price, giving you a fast profit. The downside to buying property to sell it on again is that there is a higher element of risk, as you can never guarantee when a property will sell or what price it will sell for. While you can hope that any property you develop will sell for a high price at a time when you need it to, you can’t guarantee that it will, which can cause major issues for your business.
Create a business plan
The next step to starting any business, including a property development business, is to create a business plan. Even if you are thinking of starting out as a property developer part-time, it still pays to create a business plan, as without a business plan, running any kind of business is going to be even more difficult. If you are going to start a business, be sensible and create a business plan that will allow you to take your business to wherever you want it to do. As part of the business plan that you create, it is also important to take the time to think about the financial side of things and how you will finance your business. If you require property finance, using a company like Enness Development is a great choice for property finance. The important thing is – whatever financing option you go with – that you select an option that is a good fit for your needs and is affordable in terms of repayments. As the last thing that you want is to end up in trouble with your finances.
A business plan allows you to set out a framework for your business; a set of guidelines that you can follow to help ensure that your business is a success. There are various business planning templates that you can download and use to create a tailor-made business plan for your new property development venture. Don’t forget, as part of your business plan, to outline what your short-term and long-term goals and targets are for your business, as that way you can take steps to work towards meeting them.
Be smart about location
When it comes to property development, it is all about location, which is why the phrase ‘location, location, location’ is so common in the property market. Whether you are planning on renting your property out or doing it up and selling it on, you want to choose an area that’s on the up and has huge potential for success in the near future. Instead of an area that is already known as being a ‘nice’ area, as these kinds of areas are always more expensive. Whereas, if you buy in an area that is up and coming, the cost of property is much less expensive.
As part of choosing the ideal location, it’s important to think about tailoring the property that you buy to be a perfect fit for your target audience. Whether that is a certain type of renter, such as families or professionals, or a certain type of buyer, it doesn’t matter. Just make sure to choose a location that will appeal to your target audience – take a bespoke approach to every property that you buy, and you are sure to do well.
There you have it, everything that you need to know to get into the property development industry and make a success of things as a property developer.