Property development has become big business in recent years. Many people are buying properties at auctions with a view to refurbishing them and either selling them on, or renting them out. For those considering a property start up business, there is also the option of buying a piece of land and building homes on it. There is much to think about in terms of legalities, financing and planning, when it comes to starting any business. Property development is no different.
- Skill level:
- Moderately Challenging
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Obtain any qualifications you might need. Some areas require that you are a certified developer. You should check with your county or local clerk to find out what requirements there are.
Open a business bank account in the name of your business. Some banks offer good rates for business accounts, so have a look around at different banks to see what is available.
Plan your finances and set a budget for buying a property. Many people go to auctions and the atmosphere causes them to get carried away to the point where they spend far more than they intended. Have a fixed price in your mind and stick as close to it as you can.
Have a business plan prepared so that if you need to borrow any capital you will have a solid basis to approach your lender with. A good business plan will always win you brownie points with a financial institution. Stay ahead of the prices and be aware of what properties are selling for. A good knowledge of the housing market will show that you are well-informed.
Think about profit when you purchase a property. Remember that when you sell it, you will need to cover the costs of the refurbishment and all your outlay, as well as make money. Consider the current housing market and where the best places are to buy homes that will sell easily. You do not want to be stuck with a property that you are paying a mortgage on and not using.
Find a good project manager who can run your operation. Employing a project manager will take the stress away from you, so that you can focus on your next task. Project managers will assign work, employ builders, plumbers and decorators to complete your property to the required specifications and time constraints.
Hire a financial specialist to keep an eye on your money. A good financial adviser will be able to point you in the right direction with advice on where to put your money in times when you want to accrue the highest interest rates, remove your money at short notice without penalty and make sure you keep to your own spending budget.
Employ good staff who will be reliable, trustworthy and honest. Your business ethic will translate to your buyers. The image your business reflects will have an impact. Your staff should be capable of everything and anything.
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