Your Guide to Becoming a Property Developer
Originally published on KevinCorish.com
Starting out in the real estate industry can be daunting with little to no prior experience. The property market, while highly unpredictable, is a dynamic area that yields potentially huge rewards. Finding a path to success in this field can be as easy as creating a well thought out plan and following the steps necessary to establish yourself as an industry leader. The following are a few important considerations to take into account beforehand.
Create a Business Plan
As mentioned before, developing a solid business plan no matter what type of property developer you want to become is crucial. Think about if you will need a staff of employees to help you in various aspects, in which case you will also need a Human Resources department and payroll system.
The promotion of your business would require web designers, digital marketers, or social media experts should you choose not to do these things yourself. Outsourcing these aspects of business is highly recommended to avoid overwhelming yourself as a business owner, and ensuring the work is high-quality.
Note the Potential ROI
Understanding the rental yield and return on investment for the properties you develop is very important, regardless of whether you plan to sell or not. You can measure this by comparing the annual rental income with the property’s value, with 10% typically being a solid yield. However, note that this can spike dramatically the more residents you have. For example, if you are investing in multi-family housing or a dormitory for students.
Choose Location Wisely
This is almost always the most important consideration for property developers. Your investment will gain little value if the surrounding community is not a desirable one. However, you don’t want to immediately start in a location that is already considered valuable. You must have the ability to see an emerging market for what it can become, investing early before it becomes totally saturated.
Ensure Your Property is Ready
Meeting basic safety and security requirements is an absolute must in a new property. If you are planning to serve as a landlord, it is then your responsibility that all doors and windows have functioning locks, for example. Home security additions beyond this are entirely up to you, but it would be wise to invest in alarm systems or cameras as well.
Home boilers are another necessity in a functioning home, which include water heaters, central heating, and gas. The size of these depends on the layout of the property, but these should also be made a priority.