Property development can be a hugely lucrative industry to work in and a worthwhile investment for anyone with an eye for it. You can get work with large state and commercial projects that offer huge rewards or keep a steady stream of smaller residential projects for some of the wealthiest homeowners. But it’s not an easy industry to work in. It’s fraught with challenges, and if you can’t meet them, your property development dreams might end before they even begin.
Finding your ROI
One of the most common reasons people go into property investments of any kind is because of the big returns they promise to provide. But they’re not guaranteed. You have to be able to find the return on investment for every project. This means a thorough understanding of costs, overheads, cash flow, and the bottom line every step of the way. Being able to provide accurate estimates, hold to a budget, and invoice in detail are essential to finding any potential for profit.
Freeing up the land
Sometimes, you might have issues over land ownership in locations that you’re supposed to be developing. It might be the responsibility of the client who wants to develop on that land but often the onus falls on the developer to find a way through the situation. For state or state-sponsored projects, for instance, having knowledge in compulsory purchase orders and being able to offer compulsory purchase compensation to current landowners can help you free up any project significantly. Otherwise, you might be stuck spending a lot of time and effort on a project that might not end up going anywhere.
Cutting up the red tape
It’s not just people that you might find yourself contending with, either. Sometimes, you will receive projects that require extra effort in obtaining planning permission for both new builds and extensions. Having an understanding of the laws, researching the areas you plan to build in, and knowing your ways around them where possible is a skill that can vastly improve the range of projects that you and your company can take on. There are often ways to end up getting permission even for non-development land, so that red tape isn’t as unbreakable as many might think.
Running a well-oiled machine
At the end of the day, property development is a business, not just an investment opportunity. It has to be run like a business. You have to be able to acquire and manage the funding available, to maintain a team of employees, to organize the contractors you use, and to run a business in total. It is the most hands-on form of property investment for the most experienced of property investors. If you’re not fully aware of the market as a whole and how to work in it, you shouldn’t start off in the deep end.
You will clash against regulation, against time and budget constraints, and even against people in your work as a property developer. But if you can come out on top every time, you could stand to make a lot of money.