Follow These Steps To Become A (Savvy) Property Developer:

Thanks to television series such as, ‘Property Ladder’, ‘Grand Designs’ and ‘Homes Under the Hammer’, it seems like being a property developer is an easy way to make a quick buck or two. However, this isn’t really the case, as there’s a lot more involved than just buying, quickly renovating then selling it at a higher price.

There are in fact a few key skills that a good property developer needs to identify with, in order to boost his or hers portfolio:

Buy To Sell Vs. Buy To Let – Remember there are two options when operating as a property developer, whether you rent the property out to tenants or build, renovate then sell.

The Buy To Sell option can provide you with large returns on your investment in a short-term, but keep in mind your profits can just be easily wiped due to unexpected problems with the renovation or a dip in the housing market. Ideally, you’d need a contingency fund, just in case. Buy To Let often allows you to generate a regular monthly income on your long-term investment – also mortgages for Buy To Let are accessible, providing that you can put a 25% deposit down.

Buying a property at the right time, sussing out the marketplace to find a bargain, whilst understanding its demands and the area trends are pretty much key to success as a property developer.

Remember Location, Location, Location (not the TV show) – Sometimes it’s more profitable to look for properties outside an unknown or perhaps an “up-and-coming” area… Hoping to take advantage of the future regenerated areas and the chances of stadiums, landmarks and BIG businesses being constructed; areas such as Highbury, Shoreditch, Wembley, and Tottenham.

Maximise Your Profit Margins – All smart property developers have a 30% contingency plan (if things go arise), also they tend to aim to work towards a 30% profit margin. The importance of financial control is key, as additional costs can wrack up when development starts.

Bear in mind that it’s not only the property cost that you’re paying, as insurance, builders, materials, stamp duty, solicitor fees and tax (if this falls into the higher tax bracket, it will be as high as 40%. Buy To Sell incur capital gains tax of 18% – 28%, so make sure you comprehend your margins and what you can afford.

Essential Fittings & Kerb Appeal – Keep your costs down, by spending the right amount on fittings, decor, and appliances. Tailor the costs to the asking price and your demographic. Thus meaning no en-suites if your property is for student private accommodation. Be logical in your thought process.

Choosing The Right Property For You – Beginners tend to focus upon what a property can be sold for and its profit, but the true art of property developing is finding something at the right price to you. So, buy property at good value for your money as this allows you to be on track to earn a profit of 30%. Look at options such as purchasing at an auction and or probate – often properties are discounted to 20% off.

By | 2017-09-07T12:49:22+00:00 September 7th, 2017|Commercial, Concepts, Interiors, Landscapes, Residential, Uncategorized|0 Comments
 
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