If you are interested in real estate and property development, becoming a property developer may be the right way to pursue your interest. Property development involves the process of investing, buying, developing and selling properties, such as residential buildings and commercial structures.
The property development loan London business may seem difficult to break into, but it is not outside your grasp if you are ambitious, passionate and resourceful.
In order to become a successful property developer, you need to learn about the complete development process as well as finance and development related matters. You need to have the skills and knowledge to conduct market research, organise development finance, conduct financial feasibilities, understand property economics and so much more.
In this post, we will look at what a property developer does, how to get started in the property development business and what to expect when working in this industry.
What Does a Property Developer Do?
A property developer is in charge of all the activities that take place in the process of developing properties and selling to prospective clients. As a property developer, your role may include purchasing a land, working with an architect and builder to design and construct a building, executing financial transactions, or determining how to market your property to the clients.
Property development is majorly of two types: renovating or extending the structure of the existing building or constructing the building from the ground up. Some developers might be interested in property investments, while others might choose to involve in the entire process of the construction from start to finish.
Most of the risks fall on the property developers’ part as they are the people who choose to invest in a property and build it into something else. They are primarily responsible for creating designs and development plans, managing budgets, acquiring funds and obtaining permits.
How to Become a Real Estate Developer?
There are several ways you can become a real estate property developer, but there are certain steps that you need to follow to ensure you have the right knowledge and experience to achieve success.
#1 Get a relevant degree
While there are no definite degree that qualifies you to become a property developer, most professionals in this industry prefer to associate with someone who is knowledgeable and experienced. One way to showcase your knowledge is by having a relevant bachelor’s degree. You can acquire any degree in business, management, financing, construction management, engineering, architecture or law, as having knowledge in these fields can help you with the tasks associated with the job.
#2 Find a mentor
Real estate is a team sport. No one in this industry has seen success doing it alone. You may have all the knowledge to become a property developer, but you don’t have the expertise to go through the project from start to finish. A development mentor can help you establish that expertise by allowing you to gain on-field experiences as well as guide you through making critical decisions based on their experiences. This will not only help you navigate through a complex process, but also save you from losing money in the first few projects.
#3 Use your knowledge to find space in the market
When starting out with property development, you will need to build an expertise in one area. You can either opt for commercial or residential projects, or take one step in the process, such as undertaking renovation projects. Build your knowledge and relationships within the field, and choose an area that you believe you can excel in.
#4 Create a professional network
Having a professional network is of the utmost importance if you are planning to start as a property developer. As a developer, you are going to rely on many third-party consultants and service providers throughout the project lifecycle. And, how good your network is will directly impact the speed and quality of the services they deliver. Generally, you will need to work with the general contractor, architecture, designer, development bridging finance London provider, surveyor and environmental engineers who have the right experience, reputation and credentials. The right network of professionals will equip you with complementary skills needed to go through all the challenges and make sure your development goes smoothly.
#5 Contact local agents
Find out real estate agents who sell properties in the area you are planning to develop a property. Inquire about the property value and rental for similar kind of properties. This practice will help you get a good understanding of the potential sites in the area. Local agents can also acknowledge you about local rules and regulations and how to obtain planning permits. Knowing the rules and regulations beforehand can help you avoid wasting time and efforts on the property that is not viable. In addition, it will help you build the property in accordance with the latest protocols.
#6 Find a property
Once you have acquired experience and established a team, now its time to find the right property to develop and sell. Research about what most properties worth in the area, what the rental would be and how you can add value. Properties are often listed as on-market and off-market. On-market properties are the ones that are popular, while off-market properties aren’t known in the public, but the owner is planning to sell it privately. Buying the right property in the right location at the right time can add thousands to your bottom line.
#7 Work on your finances
Property development projects require a large sum of money to invest in the properties. Unless you have a capital saved up, you will need to arrange finance to fund your desired project. Property development finance is one of the most effective ways to raise funds. Before you apply for the development finance, make sure you learn about development finance lending requirements, so you can get your finance approved as quickly as possible. The lender would want to know your experience in the property development, your credit history and how you plan to repay the finances.
As in any profession, the success of one project lays foundation for the next. It is a good idea to smart with a small project, learn the ins and outs of the development market and gradually undertake bigger projects once you are adequately aware about the market. Once you complete a project that speaks for itself, real estate professionals will want to work with you on future projects.
However, always keep in mind that all property development projects come with inherent risks that could involve financial losses, depreciation of assets and legal complexities. Hence, consult a law or financial professional before making any legal or financial commitments.