Building a successful career is never easy. Regardless of the line of business you choose, you will face many challenges you will have to overcome. In order to endure, you have to be ambitious, patient, resourceful, and in a way, stubborn.
The career of a property developer isn’t any different. There are so many things you have to think about, everything from the most commercial areas to funds you can obtain and invest. In the following article, we will give you some tips and discuss steps one has to take while on this journey.
Design a business plan
This is the first step every future business owner should take. You cannot start building anything unless you are completely familiar with the road you have to follow. Firstly, start by writing a short description of your business. How will the community benefit from it? What about people and customers? What is your main goal? Do you want this to be a full-time job? These are only some of the many questions you have to answer. There really isn’t a point in starting anything new unless you have planned every aspect of it as much as possible.
Next, think about your goals. Surely, your biggest one is probably to build a successful company, but in order to do this, you should have numerous smaller goals you will achieve first. Obviously, when creating these, you have to make sure that each of them contributes to your business and leads you straight to the main target.
Investigate the market
The next thing you have to do is explore the area where you want to develop your projects. According to Aland, the general rule is to always go with the area that is up and coming. Why? These properties will be fairly cheap, and at the same time, they have great potential in the future, meaning that you will be able to sell them, or rent them, at a higher price, and therefore, earn some money.
This is why you have to do thorough research. You can start by reading local news and learning about new transportation lines, local investments, new shops, stores, even schools, and the like. These will provide you with more than enough information to make the best decision.
Buy to rent or sell?
Furthermore, you have to decide whether you want to lease or sell the property. Generally speaking, the former one is less risky, which is why most new property developers opt for it. When you buy a property and turn it, with the goal of renting it, you cannot really expect the get the profit quickly. On the other hand, this is the main benefit of selling.
At the same time, you have to think about market changes. If you want to sell the property and market conditions plummet, you can lose your profit. Renting property enables you to receive a more-or-less steady income. Both of these options have their pros and cons, so you have to learn as much as you can before making the decision. Naturally, it is not necessary to stick to one option forever. You can change it when you feel the moment is right as you grow your company.
Now that you have made all the important decisions, have a business plan and goals to reach, it is time to think about the money. What is your capital? How much money can you afford to invest? Where can you get the rest of it?
Obviously, your first option is to apply for a loan from the bank. Gather all your documents and a detailed business plan, and schedule a meeting with property development professionals. They will go over all the information, consider your options, and present you with the best solution. You have to know that there is always a possibility that the bank will deny your request.
Unless you already have some funds stashed somewhere, you can rely on outside funding. Naturally, you can always ask family and friends for help, or you can go and find an investor to collaborate with, and so on. Whatever you choose, you have to remember that all of these options can be risky if you don’t meet monthly payments. To ensure that everything goes as smoothly as possible, you should have a detailed financial plan.
Be smart about buying
When making a profit, the trick is to do so when buying a property, not when selling it. Once you get familiar with a certain area, you will be able to understand which houses would be easy to sell or lease, what the rent would be, what is their current worth, and so on.
Moreover, before making the purchase, you have to understand whether you can add value to it. There is no point in buying the most expensive house if you cannot improve it. Basically, you won’t earn a profit since you won’t be able to increase its value significantly.
In order to make the best deal possible, you have to answer all of the above-mentioned questions. Then, you should go to property auctions and try to get the best deal possible. What’s more, depending on the situation, the area, and the property itself, you can approach the owner and discuss the sale with them.
What do we mean by this? Well, before purchasing a property, you have to make sure that you can actually improve it and make it more appealing to buyers. Maybe there is a lot of unused space that can be transformed into bedrooms. Maybe there is a large backyard where you can install the pool. Maybe there are small additional buildings that can be transformed into lofts.
Finally, when it comes to refurbishing the property, you have to collaborate with the right people. Don’t fool yourself that this is an easy task because it really isn’t. You don’t only have to repaint the walls, install new flooring, and choose new appliances and furniture, but don’t forget about all the repairs, plumbing, electrical, and gas installation.