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How To Start A Property Development Business In 2022

Claire by Claire
March 22, 2022
Reading Time: 5 mins read
How To Start A Property Development Business In 2022
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When starting a business, there are many things that you’ll need to consider, from the hiring of staff to the creation of extensive business plans and marketing campaigns. On top of these general considerations, there are even more things to think about as a property developer, and it’s understandable that this process can seem overwhelming at times. It’s important to remain focused and dedicated during the early stages of starting your property development business to increase your chances of success and potentially great profits. To help with your journey, here are our best tips for starting your property development company today.

Create A Business Plan

As with any type of company, your first step is to create a strong business plan. This plan will guide you through each step of your business and allow you to identify any potential risks and problems before they happen so that you can prepare and mitigate their impact should they arise. Your business plan should also include research into your industry as well as your competitors to identify any potentially useful tactics that you could adopt to ensure your business becomes a contender within this area. You should also set out your goals and targets to hit, providing you with guidance and encouraging hard work from you and your team.

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Identify Your Budgets

Your budgets are linked to your business plan, and need to be given significant respect at every step of the way. When building homes, there are extensive costs involved, even for those that are created using quality blueprints and plans. Things can go wrong during this process, leading to delays and, more importantly, a loss of funds. Replacing materials that have been damaged or wasted, hiring replacement staff following injury or illness, and dealing with other unexpected costs are all essential considerations when laying out your budgets. If you fail to account for all of the things that could go wrong, you could end up being caught short if they do occur. As well as accounting for emergencies like this, you’ll also want to be thorough in noting down all of the costs of materials, land purchases, and salaries and to also account for any possible increases to these costs during the year. For example, certain materials may go up in price due to shipping problems, and you’ll need to be prepared to find another supplier or pay more for those necessary materials.

Build A Great Team

A large part of any company’s success is the quality of the team behind them. As a property developer, you’re going to need a varied team of different skill sets and experiences to truly create a brilliant business. This should include everything from quality builders, electricians, architects, and surveyors. You’ll also need a wealth of different engineers, from structural and hydraulic to civil and geotechnical engineers. Of course, it’s worth noting that many of these professionals can be given a temporary contract if you’re not yet prepared to bring on this many people. Ideally, though, having your own team comprised of all of these skilled individuals will give you much more control over the quality and timing of your projects.

Acquire Insurance

When you’re building properties for people to rent or purchase, it’s imperative that you remember that you are responsible for the quality of these builds and that should any structural damage occur, which wasn’t caused by residents, of course, then you are likely going to be held responsible. This is why it’s essential to have insurance in place to cover any potential costs if major structural damage is found. If you’ve not yet sourced an insurance provider, then look into BuildSafe’s warranty which can provide you with a new build 10-year warranty on your properties. This insurance will cover you for any damages that may have been caused by your team, either directly or via an error during construction. This insurance covers brand new homes, but so are major refurbishments and conversion projects too, which could also be apartments or barn conversions, for example, as long as the project was done within the last decade. It’s always a good idea to use a specialist firm of barn conversion architects for insurance purposes when developing a barn conversion.

Sort Out Investment

Having insurance like this in place will make it much more likely for you to acquire investment from a lender. Many lenders will not provide investment to a developer without any insurance, so this should be a top consideration for you and your business. Unless you’re able to fund your developments out of your own pocket, you’re going to need to find a lender to help you cover material costs and other things like land purchases. Eventually, the chances are that you won’t need to get investments from others as your business will be able to fund itself in the future, but when you’re first getting off the ground, this is a crucial time and investments are often needed. There are a few different types of investors you can get, such as banks and building societies to private investors or crowdfunding. You could even acquire investment from friends and family, but make sure you’re certain about this approach, as borrowing money from those you know can cause issues between you if things go wrong.

Deliver Quality Marketing Content

This is an important thing to consider for any business. Your marketing can make or break your business and should be given the utmost care and consideration. With many property developers out there posing significant competition to your business, you need to ensure that your properties are getting advertised effectively to entice potential buyers to the area. There’s a lot to be said for first impressions, and those first views that people have of your property are critical. These first impressions tend to take place online, so good digital marketing content is essential. You’ll also need to provide home buyers with an in-depth look around the property via a good selection of photographs of each part of the property or even a virtual property tour if possible. Your marketing team will be able to tackle this task and also make sure they’re posting these property previews via the relevant social media channels. Luckily, estate agents will often handle this for you if you choose to build a business relationship with one but remember to choose an agent with a good track record of quality marketing tactics to increase your chances of enticing buyers.

Claire

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