How to start a property development business
From property business strategies to avoiding pitfalls, here's our step-by-step guide on how to become a property developer
- Property development business strategies
- How to avoid property business pitfalls
- Business models: Buy to let
- Tips for property development success
- Register a property development business name with our preferred company formation agent (external site, opens in new tab)
- See if you can get a Start Up Loan to help you start a property development business idea (external site, opens in new tab)
What is property development and who is becoming a property developer suited to?
For those who are keen on DIY, or want to escape their day job, renovating a house can help provide an outlet for creative urges, pent up after sitting in an office all day. And it is not as if the sector requires any particular training or qualifications and neither is there a strict template for success.
Rather than having to struggle through any bureaucracy to obtain licences, or cram hard to try and pass an exam, you are officially a property developer from the day you sell your first house for profit.
Another factor it has in its favour is the lack of any necessary overheads. Birmingham resident Mark Smith set up a property company, Always Home Ltd, at the tender age of 29. He told us that, “initially, overheads were very low and therefore running costs were easily covered by the capital injected by the directors,” he says. “As most of the work is ‘on site’ at different projects, and not customer facing, we didn’t need an office either.”
Although Smith gave up his job for his new business, it is possible to become a property developer while still working. Rather than having to jump in feet first, you can support your fledgling business with your existing job, thereby minimising the risk.
By working evenings and weekends it is perfectly possible to find a house, renovate it, and then sell it on within a six-month time frame. However, the quicker you want to turn a profit, the more time you will need to dedicate to it.
It may be worth considering seeing if you can get a Start Up Loan (external partner site, link opens in a new tab) to help you with financing, and mentoring to start this business idea. You'll also need to think about registering your business, either as a sole trader or as a company - if a company, then Smarta Formations (external partner site, link opens in a new tab) are an organisation that can help you set up.
Neil Lewis, co-author of ebook Property Development Secrets, told us: “You can become a successful property developer alongside your existing job. However being flexible about when you’re able to view a property is crucial to getting the best deals. That’s why City bankers tend to stick to Buy to Let investments because it’s more hands off.”
To help formulate your property business plan you may find it useful to download our free business plan template.