A Brief Introduction To
Property Development

How to safely identify
appropriate and profitable
property renovation projects!!!

PROPERTY INVESTMENT versus PROPERTY DEVELOPMENT

Property Investment

An investor is generally looking for property that he can either use for himself, buy and sell, or rent out to others immediately after buying.

Property Development

A developer is normally looking for somewhere that needs to be refurbished or renovated before he can use it or rent it out to others. A professional developer can reduce costs by using his own employees and by purchasing the materials at a discount. Often a professional developer can also save money by simply scheduling the work efficiently.

While it is true that a private individual might expect to pay more to renovate properties than a professional developer would, the increase in popularity of DIY stores means that some 'handy' individuals could now refurbish or renovate for about the same costs as a professional developer.

Managing Your Improvements

So many factors, including the cost of labour and materials, financing costs and the market itself affect your actual profit margin when working on property development projects. This makes it critical that you do your research BEFORE you make your offer to purchase (“note interest” in Scotland).

The Scope Of Improvements

During your research, you’ll need to determine the scope of the improvements needed. In other words:

• How big is the project?
• Will you be able to complete the work yourself or will you need contractors or builders?
• Does it require any demolition?
• Is structural work needed, such as inserting a joist or making a major repair or replacement?
• Does the property need damp proofing?
• Are any electrical or gas repairs needed?

Once you have the answers to these questions you can start planning for the improvements.

Planning Permission

Let's assume your research indicates that this is the “perfect” property development renovation project; you've arranged the finance for the property and improvements, and you've hired a solicitor to handle the purchase. How do you know you can make the necessary renovations? Will you need permission from the local authority?

We recommend that you take your property development plans to the local authority and discuss them with the planners. This way you'll know if the plans will be rejected or, perhaps, what changes you need to make to have them accepted.

Then, if appropriate, you can proceed with the purchase knowing what has to be submitted for approval and an approximate timeframe in advance. Keep track of the date the plans will be submitted for approval and wait for written approval before you begin the work.

Summary

OK, that's the end of this introductory section on property development , and I hope you found it to be informative.

The Blue Cherry Knowledge Base library contains a lot more 'free to all' advice and information on the property investment business. In addition to this introductory content, however, we also provide more in depth advice and information on the subject of property development and all the other topics listed in the library, including details of our own methods of operation, and some of the strategies we apply. This more in depth, valuable content is freely available to those who subscribe to our free E-Course by simply registering a first name and an e-mail address with us.

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