Making a good profit from buying property, doing it up and selling it on is a career path that has crossed many people’s minds at some stage, whether it’s from personal experience or simply seeing people on television making it look easy. Either way, it’s something many people get into and make a lot of money from, and you don’t necessarily have to have a lot of experience from the beginning to make it work, but there are certain points to check off your list before you begin.
Firstly, consider whether this is really for you. You might not know how your project is going to turn out, but you can be pretty certain it’s going to require a lot of detailed planning, extensive attention to detail, and a huge amount of hard work from start to finish. Property development is stressful because you take on a lot of responsibility, not only for yourself but for the property you’ve invested your money into, your family and even the people you’ll be employing to help you. The work is likely to be exhausting. If this is a problem for you, maybe you should choose a different path.
If you decide you’re capable of coping under the pressure, that’s great, and for some people this brings out the best in them. You can move onto the next step: arranging your first project. Financing your project in the long term is going to be vital, since it’s not just the initial investment you need to find upfront, but all the costs of running the project through to the end need to be accounted for. Whether you’ve got the money yourself or need to borrow it, make sure this is in order before you begin.
You’ll be looking for a property that’s not in the best shape, meaning you can modernise and improve it without too much investment. To get this at a good price, the owners you’re buying from need to be motivated to move sooner rather than later. When you come to sell it on, you’ll also be looking for someone keen to make a quick decision.
You might also want to consider property auctions, because although they are more risky and you might have to bid on properties without knowing the full history or even seeing what the place looks like, there are some real bargains to be had and once you have a little experience you’ll be able to find hidden gems that you can turn into high profit margins.
Once you’ve selected a property, you need to remember to focus on profit. Take a look at the surrounding area to get a feel for the kind of people who are likely to be interested in your finished property, as well as finding ideas to extend or redecorate based on what neighbours have successfully tried.
Ensuring you get all the work done under budget is an obvious point, but many people fall at this hurdle because they get carried away with the excitement of a new project and the idea of getting it exactly the way they want. What you should be doing instead is ensuring you don’t lose sight of the end goal. Make it work on the budget you have or it’s not going to work at all.
Once you have a basic grasp of your objectives and the kind of responsibilities you need to take on, you might find you’re ready to enter the world of property development. With any luck you’ll be able to turn your first project into a success and hopefully continue working your way up the ladder, increasing your profit margin each time.