This month at SaveMari, we are looking at Real Estate or Property development and ways to become a successful property developer.
Property development is defined as a business process, encompassing activities that range from the renovation and re-lease of existing buildings to the purchase of raw land and the sale of developed land or parcels of land to others.
Real estate developers are the people and or companies who coordinate all of these activities, converting ideas from paper to property.
When it comes to investing in property, you make money when you buy it than when you sell it. Therefore, it is essential to pay the right price for a property. Every dollar or pound you can knock off the asking price is money straight in your pocket. In addition, be on the lookout for properties that have planning applications with the local authority.
Property development is not a very straight-forward business and you need to ensure that you carry out extensive research. The hard thing about purchasing property is, you could make a lot of money or you could run at a loss and end up in debt.Make sure you do your homework, weigh the pros and cons and work out exactly who you will be trying to sell to, if you are planning to sell. It is also important that you work out how much you will get from the property and whether the profit margin is worthwhile. Research suggests that property development is very capital intensive and you have to get your sums right.
Location is also an important factor when it comes to buying property. Location, location, location, is possibly one of the most overused phrases in property development but, if you really think about it, it really is about the right location. It isn’t always about buying a property in an area that is deemed brilliant; it is about buying property that is accessible to services like shops and public transport, to name a few, and wanting to be in an area where other developments are taking place and where there is room to expand or grow.
If you’re planning on a buy-to-let scheme, make sure that you factor in the rental yield, especially depending on the area you buy your property in.
In conclusion, make sure that you have adequate funds in place for your property development plans. Are you financially fluid, are you able to get a loan or a mortgage and if so how are you going to sustain? These are all the things you need to take into consideration. If you need advice, banks have dedicated property finance experts or advisors who can talk you through your options.
Good luck and we look forward to seeing you on the property ladder soon if you are considering it and for those already on it; we look forward to your next property endeavour.