How to Start Off in Property Development
Property development is an industry largely oriented towards opportunity. Consequently, it requires some risk and a willingness for knowledge acquisition over time. Property development can grant financial freedom if you are engaging with the right projects. So, how do you start off in property development? Some important steps to consider have been listed below:
Research/Education
Although there are no requirements to become a property developer, there is an added advantage of standing out to employers with a degree. If you don’t have a qualification, there are plenty of reputable online courses which can help you up-skill in the field. Additionally, reading up on text relating to the property development process has proven to be advantageous.
Reach Out to Industry Professionals
It’s important to take the opportunity to speak with successful property developers who may be able to impart wisdom or help connect you with the industry. Online platforms are a great way to achieve this (e.g. via LinkedIn), as well as in-person through networking events. The Urban Development Institute of Australia offers a member’s directory, networking events, conferences, resources, and professional development courses.
Have an Understanding of the Development Process
The entire property development process spans for about a year, depending on a variety of factors. This process is an essential component to understand before becoming a property developer. These steps include:
- Pre-purchase investigation
- Contract negotiation & property purchase
- Planning & development approval
- Documentation & drafting working
- Pre-construction
- Construction
- Completion
- The decision to sell or maintain as a long-term investment
Financing
It is important to understand the financial aspect of being a property developer, as well as actually having the financial capability to purchase land. This means getting approved for loans, as well as contracting financial advisors or/and accountants. You will need to develop a strong business plan to convince banks you will be profitable, in order to be eligible for loans. You should conduct research on the types of loans you may be eligible for and consult with professionals on the best approach to take.
Monitor the Market
The market is always changing, so when considering where to buy property, there are multiple sub-categories of importance. By considering these things, you are making the most of your budget. Some of these include:
- Local & median property prices
- Demographic
- Income bracket in area
- Geographical location
Evaluate Your Current Position
This step entails self-analysis in terms of finances and available time. By assessing your current financial status (including borrowing power) and time available to secure and manage developments you can start to formulate a business plan. Accordingly, this initial reflection will give you a realistic approach to selecting the type of development that best suits you.
Gain Experience
It is advantageous to have some experience under your belt. This will in turn increase your confidence in commencing work on projects. This could be achieved by hiring a development manager to oversee your work and the entire development process. Further to this, there is the option to join an investment group focused on property development. A development syndicate (whereby multiple developers pool their money into a project managed by professionals, lowering risk) is also a great option. It is also a good idea to find yourself a mentor who is well versed in the industry. This way you can receive valuable knowledge and feedback.
In order to make your transition easier, relevant software can be really advantageous in managing your property development processes. At Pipr, we manage your stock, contract and sales as well as creating high-quality marketing solutions for your house and land packages. Contact us to find out how we can help ease your transition into property development.