Despite the uncertain nature of the market over the past two years, property is still a great way to make your money go further and developers are still achieving amazing successes alongside landlords renting out portfolios of properties.
Fortune really can favour the brave, but knowing what you're doing is crucial.
Still want to be a property developer?
Then read on...
How to become a property developerProperty development is, quite clearly, not a path everyone can take.
While it can be classed as 'a job', it's not something you apply and submit a CV for.
But it does require a certain set of skills or, at least, a certain mindset - not to mention a certain amount of money before you even start.
Let's look at the steps you'll need to take to become a property developer... and we'll also throw in some helpful hints and tips along the way.
Property development is a businessSo you'll need to run it like one.
That means having a comprehensive business plan, capital and budget structure in place before you start on the road to becoming a property developer.
Start with the end in mind.
By that, set a goal for where you want your property development journey to take you.
That will mean considering the following before you start:
* The potential need (and costs) for staff to help you manage things like renovations
* Any marketing needs, should you need to promote your work through a website or on social media
Buy-to-let or sell on for a profit?Or perhaps a mixture of both?
Your business plan will also need to have an exit strategy, so you'll need to establish whether your goals are short-term or long-term.
If you are looking to build a legacy and boost your pension pot through property, a long-term approach through buy-to-let might be best.
If you are looking for quick profits before moving on, buying to sell would be a better approach.
Or perhaps you want to buy to sell your first few properties in order to build up enough capital to purchase several rental properties?
Whatever your aims and ambitions, make sure they are clearly established before you start.
Best areas for property investmentThere are two prongs to this.
Firstly, consider carefully which areas would work best for you depending on your short-term or long-term aims.
If you are looking to build a buy-to-let portfolio, you could consider somewhere like Reading, where high employment prospects, not to mention the arrival of Crossrail, are driving demand for rental properties.
If your'e looking for a quick return on investment through developing properties and selling them on, consider your location carefuly.
Moreover, if your approach is short-term, think carefully about which kind of property would work as an investment.
Demand for rental flats and apartments close to the station in Reading, for example, will be high thanks to the arrival of Crossrail, which makes a capital commute easily achievable.
Research your areas and try to spot a sales market that is on the up, rather than one that is well-established and already in demand.
Don't make the mistake of thinking you have to buy in a prestigious postcode in order to ensure an easy sale post renovation.
Often the best areas for property investment are the worst areas on paper.
Because in certain areas the only way is up - and this can help maximise your profits.
Don't overspend on purchasesThe trick here is to find a seller that really needs to sell.
And we mean, really needs to.
This can help you secure a property at well below the asking price, meaning you are already well on your way to making a solid profit.
Try to find out as much as you can from the estate agent when enquiring about properties to view.
If a seller is motivated to sell quickly and with as little hassle as possible, move quickly if the property is right.
Even if the property is perfect for development, or as a long-term rental investment, paying top price is folly - doing so will eat into your margins from day one.
Perfection doesn't always mean a property is right, so walk away and move on to the next potential investment opportunity if the price is not right.
Think about who you will be selling or renting toIf you're buying a four-bedroom house to develop, who are the prime buyers who will be willing to pay a premium for a 'finished' home?
And, most importantly, what will they expect?
A property like a four-bedroom semi-detached home close to good schools will be ripe for a family.
And it's likely they'll expect a better fit-out than if you were going to put the property on the rental market for students.
Think carefully about how your target buyer will use the space you have purchased and ponder their needs.
If you can think like them, you'll be far more likely to create a home they'll want to buy.
Property development salaryIf you are looking to replace your salary with income earned through property then the best way to do so is to build a portfolio of rental properties.
For this approach to work, you'll need to work out a property's rental yield and how best to achieve a solid income from your investment.
While property development and a buy to sell approach can generate large returns, often the profits from one property will be pumped into another, meaning these kinds of developers are often asset rich rather than cash rich.
What a property developer or landlord earns is essentially down to how successful they are and how many properties they either rent out or have developed.
And to be successful, you need to be savvy, business-like and on top the market conditions where you invest.