Property Development Making A Living From Developing

Date Published:

04/06/2008

We now look at juggling people, administration, finances, fulfilment and watching out for the unexpected!

People

Property Ladder presenter Sarah Beeny freely admits that the key to her enjoyment of property development is the fact that she works with family and friends. As a full time developer you will need to source and then nurture professional relationships with a wide variety of people. This may include: estate agents, an independent mortgage broker, a solicitor or conveyancer, surveyor, accountant, builders, plumbers, electricians, tenants, letting agents, and perhaps a project manager and architect. You will also need to form constructive relationships with neighbours who might be affected by your development.

While property may throw up unexpected and unwelcome surprises, it is almost always people who will surprise the most. Suppliers will fail to deliver on time, trades will leave you in the lurch, buyers will back out at the last minute. The successful developer will always have the foresight to have developed a contingency plan.

Administration

Successful developing is a precise process, permissions have to be sought, deliveries and trades scheduled and then rescheduled, measurements taken accurately and budgets adhered to rigidly. A failure to keep an eye on any one of these details can delay a development for weeks and add serious costs to the project. Human error is common, and regardless of whose fault it is, the developer pays the price. Developers will also now of course face the additional paperwork and expense of preparing Home Information Packs (HIPs), which come into force in 2007

Finances

If juggling your personal finances is a monthly nightmare then full-time property development may not be for you. Multiple on-going projects will of course require separate budgets. Becoming self-employed will now also mean the annual chore that is the self assessment tax form, as well as sorting out your own National Insurance payments, health insurance and pension plan.

Fulfilment

Something about the idea of property development seems to bring out the show-off in some people. No professional developer is in the business for applause. To realise that vital 20% profit margin you need to develop the knack of fulfilling your target buyer's expectations, no more, no less.

The Unexpected

Even the professionals can occasionally be caught unawares by an unforeseen or overlooked circumstance. A true professional will always have built an allowance for this into their business plan, allowing them for example to profit from a buoyant market but also to be immune from a sudden dip in demand.

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The views represented in this article are those of the author and not of Channel 4. The purpose of the article is to provide general information only and does not constitute financial, investment, legal or other advice.You should not rely on any information provided in this article and you should always seek out independent professional advice relevant to your own particular circumstances.