In some ways, all business plans are the same. You need to explain in detail what you want your business to have subdivision developer to do and how you plan to do it. If you’re making a plan for your own use, you won’t need to go into as much detail as if you want to start a full-fledged property development business and pitch to investors, but there are still some key things you’ll need to know before you start investing.
1. “Buy To Rent”
Even though this may sound appealing, and the rapid rise in UK house prices has made a huge market for attractive rental properties in towns and cities, you will ultimately be responsible for maintaining the property. This includes arranging for repairs, making sure that things like the smoke detector and boiler are regularly inspected, and possibly even finding tenants and checking their references and credit scores. Most of this work will be done for you by a letting agency, but they will charge you for their services, which will cut into your profit.
Buy-to-let is a great way to get a steady stream of income, but it’s not an easy way to make money quickly. You’ll need to be committed and always put your tenants’ needs first (they are providing your income after all). You may also need to plan for times when the flat is empty while you look for a new tenant.
2. Buy To Sell
Buy-to-sell, which is also called “flipping,” is when you buy a house, keep it for a short time, and then sell it again. For this plan to work, you’ll usually need to buy a house that needs work, like fixing up the inside or turning the attic into an extra bedroom. Then, you fix up the house as needed and sell it for a profit, taking into account the cost of the work. The more work that needs to be done, the bigger the risk and the bigger the possible profit, but it’s best to start small so you can get a feel for the process.
3. Studying The Market
Before you spend any money, you’ll need to do the math and find out what’s going on in your chosen area. You’ll need to know what people looking to buy or rent in that area want and how much you can spend on a house.
4. Location
It’s such a cliché that it’s the name of one of the UK’s most popular property TV shows, but a big part of successful property development is choosing the right location. But this doesn’t mean you should always buy in the best part of town. Whether you want to rent out or sell your property, prices are probably already close to their peak, and the value of your property won’t go up by much. The key is to find areas right before they become popular and house prices go through the roof.
