Let us start by attempting to understand the straightforward definition of a property developer. A property developer is a person who earns a living by developing new real estate or remodelling existing residences to resell for a profit.
Few people in the UK love bricks and material, therefore real estate investing has historically been appealing to anyone trying to increase their wealth or even make it their main source of income, according to renowned businessman Stephen Taylor.
Property development is still a sound long-term investment strategy with the potential to generate big profits if done properly, even though government rules have clearly had an impact on the UK housing market and made it considerably less appealing than in earlier decades.
Know your plan first
There are 2 key questions that you must ask yourself before you start:
- Once completed, whether the property will be sold or used as a rental property?
- Do you want to build the property from scratch or buying any existing property?
Knowing these 2 things will enable you to plan both your strategy for exit and the route you have to follow to get there.
You must know what you want exactly from your new development before you begin. That way you will know what path you will take to achieve your goal.
Write a business plan
After taking care of the aforementioned, it is time to create a property business strategy. Be as much detailed as you can, break down those big goals. You need to take care of the few things:
- Analysis of all your strengths, and weaknesses
- Analysis of all threats and opportunities
- Market research
- How you will fund the venture
- What will be your projected returns
- Who is going to associate with your project
- How you will acquire the property/land
- What will be your development strategy
- How you will find contractors
- How you will handle sales and marketing
- Your exit strategy
- Work out your financing
In addition to above the following are a few things you must do.
- Do your homework
You must properly assess the area and its demography and local rules before you venture into your project. Check what is coming between you and achieving your goal.
- Know your target audience
Knowing your target audience can help you to develop the right property for them, and you must also know what cost will be affordable for them.
- Have a vision
It is very important when you are investing in any property for development that you:
- Know your end goal
- Have a very clear vision of how you meet your goal.
- The importance of timing
When investing for any property, you must stay calm and do your research thoroughly. Right time to buy and then sell is very crucial.
The important thing to understand is that it is not a quick way to gain money. It will be a while before the market returns to the kind of huge gains we experienced in the past, despite economists' cautious predictions that it will over the medium term. However, it can be a good source of long-term investment if tackled with the proper perspective.