What Really Goes Into A Property Development Business?

If you have an eye for investment, the housing market, and making a property as appealing as possible, you may want to find a career capitalizing on those skills. Property development is more than just building and it’s more than just buying and selling property.

It’s the step-by-step process of finding, improving, and selling properties for a profit and it can be a hugely lucrative business in the right market. But what goes into getting such a business off the ground? What are the skills you need, the partners you need, and the processes you have to go through?

The funding

Property development is all about making investments pay off. As expensive as property is, of course, you’re not necessarily going to have all the cash you need to get started on hand.

All throughout your career, in fact, you’re likely going to have to keep finding and tapping sources of funding.to avoid eating the brunt of costs yourself. Property development loans don’t work like new build loans, either.

You don’t get the lump sum of cash all in one go, but rather it tends to be split into different stages, each stage representing a stage of development. For that reason, experience in creating and working to budgets on developments in the past could be crucial.

The strategy

Not all property development business work exactly the same, either. You might have a wildly different profit model from another business in the same market, for instance. In plain terms, your profit model might be based strictly on the purchase, development, and sale of land and property.

Or, depending on what your local market is like, it might be based on buy-to-let or build-to-let properties. You need to figure out your market, which of your options is going to be most profitable, or if perhaps you need to mix both strategies to some degree and come up with the appropriate business plan.

There are templates available to help you craft it, essential as it is. If you don’t have the path to profit laid ahead of you, it is going to be all the harder to find it.

The speciality

Most property developers specialize in some kind of property or some kind of investment opportunity. The most common kind is those who buy, renovate, and sell resident homes to the private market.

But you might focus on acquiring land and building new properties or developing properties for commercial entities instead. Finding a niche is valuable because it gives you a specific market to focus on. Properties have to be developed not by any one rule-book but catered to the specific buyer or tenant.

Learning what their priorities will be can allow you to focus your budget more specifically on what is most important about the property for them, not just a scattershot approach to increasing the value of a property.

The location

There’s one rule in property development that you have to learn above all else: you don’t make your money when you sell a property, you make it when you buy it. For that reason, opportunism is one of the key factors in a successful property development business.

Finding those opportunities for profit is all about location, first and foremost. You need to get to know different areas, look for the signs of neighborhoods that are on the rise, changes in demographics, whether a city or area is more rent-friendly or more profitable for buying and selling, and so on. Pay attention to rent price, to recent sales, and to signs of development in an area such as new services and businesses opening there.

The timing

Opportunity is all about timing, as well. The housing market has its ups-and-downs not just in the grand scheme of things but from year to year. To profit as much as possible, you need to buy when prices are cheap, then develop and hold onto properties until prices are high again.

Finding the ideal time to buy and sell might not always depend on seasonal shifts, either, but on market dynamics. It’s a good idea, once you’re up and running, to sell property before you buy, so you don’t always have to rely on bridging loans that can impose some restrictions on your overall budget.

The connections

As a property developer, your expertise is going to be in finding the best possible opportunities for property development. You are likely not going to be a contractor or renovator yourself, so you need to build connections within those industries to make the actual development side as painless and cost-effective as possible.

This includes builders, utility fitters, painters, renovators, architects, and companies that rent out equipment like diggers and tip trucks. Fostering connections within these industries is crucial. The better your relationship, the longer you’ve worked with them, the more likely you are to benefit from better deals.

Beyond just searching for these services like a consumer would, take the opportunity to network within trade shows that tend to act as a shared space for many of these services.

The marketing

The property market isn’t the only one you need to concern yourself with. You need to focus on building a brand as a property developer to the market of consumers, as well. This includes learning to market the properties you develop and doing so without the assistance of realtors can reduce your overall costs.

But property developers can also extend their services to others, such as landlords or property owners who want to increase the value of their own property. If you offer your development services to others, then you have a strong brand.

This includes having the right digital brand, but it also includes having show homes created in conjunction with interior designers and stylists to give an idea of the final product you offer.

If you don’t have any experience either in renovations, property investment, or construction, then it’s probably a good idea to get some. You need to know the market and what’s involved before you try to make a career profiting from it.

 

What Does It Actually Take To Get A Business Off The Ground?

If you’ve ever watched Dragon’s Den, you could be forgiven for thinking that all you really need to hit the big time in business is a bright idea. While this is undoubtedly an excellent foundation, it certainly isn’t the only ingredient you’ll need.

Setting up a business is not a straightforward task by any stretch of the imagination, and there’s a lot of hoops to jump through before you reach the finish line. If you’re thinking about acting on an ingenious idea and trying to crack the world of entrepreneurship, this guide should come in handy.

Financing a new business

It’s impossible to establish a new company without spending money. The amount of money you spend will vary hugely according to the type of business you plan to launch, but there are likely to be significant costs involved.

It’s so important to determine exactly how much you money you’ll need and how you’re going to obtain that cash. Many people invest their own money, but if your savings won’t cover the startup fees, you’ll need to consider other sources.

You could look for investors, you could apply for a loan, or you could look to bring partners on board. Whichever path you take, you’ll need to plan every step in detail so that you know where your money is going and how you can recoup it in the best way possible.

If you’re not an expert when it comes to finances and accounting, it’s wise to arrange meetings with financial advisers and take a look at what other companies do to maximize efficiency and lower running costs.

Researching the market

Before you take any giant leaps into the unknown, it pays to do your research. To be successful in business, you need to ensure that there’s a market for your company. If you’ve got a product, who is going to buy it?

What other similar products are already on the shelves? How much do those products retail for? Will your product serve a purpose? Are you offering something different? If you’re providing a service, is there a demand out there? Have you got any competitors? Have you got a USP?

Who are you targeting? Research should provide you with all the answers to these questions and help you decide whether or not there’s a good chance that your business will attract attention and generate sales.

Use the information you obtain from surveys and polls, focus groups and consumer trials to shape your business plan, improve prototypes, plan your pricing strategy and design your marketing campaign.  

Investing in equipment

Almost every company in the land depends on equipment of some kind to deliver services or products. When you’re working on your finances, and you’re drawing up plans for production and logistics, consider what kind of equipment or machinery you’ll need to get the business up and running and operate as efficiently as possible.

If you’re in the construction industry, it’s a good idea to keep an eye out for diggers, towers and mobile cranes for sale and to look into hire costs for machinery you’re unlikely to use on a regular or long-term basis. If you’re kitting out an office for a telesales company, have a look at the latest computer systems and communication programs and equipment.

You may find that investing in cutting-edge tech will cost more now, but save you money in the long-run. If you’re running a hair salon and you’re on a budget, look for nearly new equipment, which will enable you to achieve the same results without spending as much. Whatever kinds of tools or machinery you need, shop around for the best deals and consider buying in bulk to take advantage of lower prices.

Hiring staff

Most business owners employ at least one other person, and some companies have teams of hundreds or even thousands of people. If you’re in the midst of planning a grand launch, consider how you’re going to staff your business.

How many full-time roles do you need to advertise and how much do you have available to spend on wages? Once you’ve got a core team, consider how you can access skills without adding to your annual wage bill. There are alternatives to offering full-time contracts.

If you have a seasonal business, for example, consider short-term and temporary contracts. If you work on projects, for example, building houses, you may wish to think about hiring freelancers and working with contractors on specific jobs.

If you run a company that has many different departments, it may be beneficial to weigh up outsourcing options. This can help you to run the business smoothly and effectively for less.

Legalities

When you’re watching TV, it’s easy to get a rose-tinted vision of what happens when you set up a new business. On the small screen, you don’t necessarily see what goes on behind the scenes. You can’t just design a website or put your name on the side of a van and start touting for customers. You have to make sure that your company is licensed and that it operates according to regulations.

Promoting the business

Once you’re ready to set the world alight with your new venture, it’s time to spread the word and promote your company. Now that you’ve figured out how to get all the cogs turning in the right direction, you need to make people aware of what you do and how you could benefit them.

There are countless marketing methods you can use, and you should utilize the results of market research to design a strategy that has maximum impact. Use methods that will attract your target demographic and try and be original. If you’ve got a brilliant USP, you need to sell it in the best way possible.
Have you got ambitions to be the next business mogul? Have you got a fantastic idea, which you want to turn into a profitable business model? If so, hopefully, this guide will prove useful, and you’ll soon be watching your empire grow.

How To Invest In Real Estate With Less Than $100,000

Forget about your cryptocurrencies and stocks, real estate is still the best investment opportunity out there. The main issue with it is that large portions of the populations feel as though they’re sectioned off from it.

This is because investing in real estate demands that you have a lot of money. People are pumping hundreds of thousands of dollars into different properties – it’s not something you can get involved in if you aren’t a high earner.

At least, that’s what most people think. However, as you will see in this article, you can invest in real estate with less than $100,000.

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Put A Deposit On A Mortgage

If you have less than $100,000 ready to invest, then you probably can’t buy a house outright. But, what you can do is use your money to put a deposit down on a mortgage.

This will give you access to money that you can use to buy a house. From here, you have many options at your disposal. You can either rent the property out and collect monthly income, or you can try flipping the property to earn a profit on what you paid.

Naturally, you still have to pay off your mortgage, so remember that when you flip your property to ensure you make enough to cover that. With monthly rent, you can use tenant payments to pay off your mortgage bit by bit until it’s gone. Either way, you’re the proud owner of a property, and you invested less than $100,000.

Invest In A REIT

So many people are unaware of REITs. For those that don’t know, this stands for real estate investment trust. It’s this idea that you invest your money in the trust, and gain access to income-producing real estate.

You’ve basically bought shares in the real estate that the REIT owns, get it? As this Rich Uncles review shows, you can start investing in REITs with as little as $500. Obviously, the more you invest, the more shares you own, meaning the more money you get back.

With a REIT, you could have money in various different properties all generating a monthly income. It’s one of the most affordable ways to make money from the real estate market.

Buy Some Land

When you think of real estate, you think of houses and other buildings. But, land comes under the same category too. What’s more, the land is considerably cheaper than buying properties.

Especially if you’re buying farmland, which is cheap and presents many opportunities for you. Now, you can easily get your hands on over 10 acres for under $100,000 – I think the most expensive farmland is around $6,000 per acre, and the cheapest is about $1,000 per acre.

With this much land, you can start a farm and make money from it. Or, you can sell the land on to other people when it improves in value. Or, my favorite idea, you can contact wind energy providers and tell them they can install a wind turbine on your land. They’ll pay you for this, and you’ll keep getting regular income from it. A smart way to invest in real estate if you want to stay away from properties.

There you go; three ways you can invest in real estate with less than $100,000!