What is Property Development?
Property Developers look for opportunities it could be undervalued land and building, unused land and buildings, unused land and buildings or underused land and buildings. It could be an old barn and old industrial units, a house that’s falling into disrepair. Property Developers look for land and buildings that they can add value to. By adding value, it could be by building an extension on it to taking segments of a piece of land and put a new dwelling. They understand they need no money and take no risk. Most Property Developers use legal agreements that will allow them to control property for no money whilst they get planning.
Main Players in Property Market
- General Public – they make up the vast majority of buyer and sellers. They are owner-occupiers were they purchase a property, and they live there.
- Investors – these people buy with their heads based on getting a fixed return of 5% or 6%. However, most buy to let investors pay far too much by purchasing off-plan and being told they’re getting a good deal and equity by buying below market value.
- Property Developers – they are shrew buyers who buy a property with the idea of adding value into it. In order to make a profit, you’ve got to buy at the right price. It is essential that you buy the right price.
Types of Property Development
1. Renovation – people often buy renovated properties because it will be appealing and they don’t want to be bothered in lots of work. I suggest staying away in renovating flats unless its in Central London. There’s a lot of problem with flat leases and landlord issues, so you be better looking for houses to renovate. Once you renovate the house, make sure the outside structure is good, remember first impression count. Make sure the front door and entrance area is lovely, a good quality kitchen, good quality carpets and bathrooms. And updated boiler and heating system so it’s very energy efficient.
2. Conversion – common conversions are old houses into flats. However, you have to investigate your target buyers in that area. Some buyers like a parking area rather than a garden and some don’t want a communal area.
3. Development – more about buying a site or auctioning a site. And getting planning permission to build residential dwellings on it, it could be combining numbers of the back garden and finding access in order to construct small developments.