Property Development: Going with the Trend
Parmdeep Vadesha
July 02, 2008
One doesn´t have to be a financial sage to understand why property development has attained huge popularity. Over the last ten years, property values have experienced a remarkable upsurge that brought on a flood of media reports on the property boom, prompting many to invest in bricks and mortar.
Despite that, there have been recent reports that the housing market is experiencing an uncertain time. While experts say that the last decade has brought a significant increase in capital values and that properties have reportedly been increasing by ten to twenty percent each year, that may not be the case any more.
To become a property developer you will need funds of your own set aside or at the very least have access to capital through other people.
While that may be the case, it does not mean that investors should not take the property plunge. Those who are not intimidated by the current market will fare well when they put the following tips to use:
1. Location should be the first thing to consider when buying a property. Even in times when the market has stabilised, properties situated in the best locations and priced correctly always sell quickly.
2. Research the area of interest. Consider the social demographics, the supply and demand factors and the local economy. Make sure that the development is tailored to the demand in that area.
3. Buy a property that will be suitable for both resell and rental. This will help maximise the opportunity to earn profits. The two markets do not necessarily go in similar directions. Often, when one of them declines the other picks up.
4. After a potentially lucrative property has been found, make sure you locate a professional team who can turn things around fast. The sooner the property is finished the sooner investors can make a return on their investment.
5. Ensure that the finance package allows for changes in payments when the property takes longer to sell or let than anticipated. This will avoid stretching them too far.
6. Determine the amount that should be spent and do not go beyond it. The important thing for developers to remember is to make sure that they buy low in order to achieve profit. Learning how to purchase properties below their true market value is therefore essential!
While property development is a lucrative business opportunity, investors should take calculated steps and not rush into it. With many amateur developers making lots of mistakes, it pays to follow the advice laid down by experts to ensure that their goal of earning significant profits will come to realization. Together with the right research and level-headed judgment, developers will have the right foundations to build a strong business venture.
Despite that, there have been recent reports that the housing market is experiencing an uncertain time. While experts say that the last decade has brought a significant increase in capital values and that properties have reportedly been increasing by ten to twenty percent each year, that may not be the case any more.
To become a property developer you will need funds of your own set aside or at the very least have access to capital through other people.
While that may be the case, it does not mean that investors should not take the property plunge. Those who are not intimidated by the current market will fare well when they put the following tips to use:
1. Location should be the first thing to consider when buying a property. Even in times when the market has stabilised, properties situated in the best locations and priced correctly always sell quickly.
2. Research the area of interest. Consider the social demographics, the supply and demand factors and the local economy. Make sure that the development is tailored to the demand in that area.
3. Buy a property that will be suitable for both resell and rental. This will help maximise the opportunity to earn profits. The two markets do not necessarily go in similar directions. Often, when one of them declines the other picks up.
4. After a potentially lucrative property has been found, make sure you locate a professional team who can turn things around fast. The sooner the property is finished the sooner investors can make a return on their investment.
5. Ensure that the finance package allows for changes in payments when the property takes longer to sell or let than anticipated. This will avoid stretching them too far.
6. Determine the amount that should be spent and do not go beyond it. The important thing for developers to remember is to make sure that they buy low in order to achieve profit. Learning how to purchase properties below their true market value is therefore essential!
While property development is a lucrative business opportunity, investors should take calculated steps and not rush into it. With many amateur developers making lots of mistakes, it pays to follow the advice laid down by experts to ensure that their goal of earning significant profits will come to realization. Together with the right research and level-headed judgment, developers will have the right foundations to build a strong business venture.
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