Follow on Facebook
Follow on TwitterInspired by TV show like How To Be A Property Developer and Property Ladder thousands of people are now looking to become property developers.
The basic formula is to buy a property that fits one of the following descriptions:
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change of use,
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in need of renovation / modernisation,
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can be split into flats,
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land can be split and a new home built,
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land with planning permission or potential for planning permission or
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potential to extend.
The property is then developed and sold on. Typically most property developers aim for a profit margin of at least 20%. With the average house in the UK now selling for around £200K it’s clear that property development can be a lucrative business. It does however require significant capital to get started.
The key to a successful development is to buy the property at the right price, and then to carry out the appropriate development work within budget. Typically first time developers will pay too much for the property or land to be developed and then either over specify the development for the target market, fail to stick to their budget or both.
This post is part of my property business opportunities series.
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This blog is about business opportunities and ideas that I spot, think of or hear about and think are useful and interesting. It is intended to provide ideas and inspriation for you to help you find the right business idea for you to then grow it into a successful business.
Do you think that the property development market bandwagon is full yet? Whilst i was looking for a property last year (the idea was we were going to bu a rundown property and renovate it ourselves) we were constant faced with estate ages saying that it is very hard to find a property which can be developed and those ones which are available have inflated process in the knowledge that a developer is waiting to buy it. I still think that there is good money to be made in propery development but the risk is much higher than it was say a few years ago.
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The bandwagon is full of amateurs and yes many of the simple development opportunities are now over priced. As such for a novice property developer the risk is a lot higher.
That if you take your time and learn about the business before jumping in, it is still possible to get into property and to find properties with good development potential.
The trouble is few take the time to learn about the business before just diving in.