How to get started in property development

Have you ever wondered how you get started in property development?

I’ve recently noticed a trend in budding developers – they are looking for an overview of the property development process and they want it in a simple and accessible way.
It’s probably in part because many of the property markets around Australia are flat or falling and these real estate investors are looking for ways to manufacture capital growth at a time when general growth is slower or non-existent.
That’s why I’ve created this comprehensive guide covering the basics of property development.
I want to make finding the right information as easy as possible.

Why Property Development?

I understand why many would wonder how to become a property developer because when you become a real estate developer if you get it right you can:

  • Save money – your project could cost 20% below market value
  • Make money – you could make large development profits
  • Get better rental returns – which helps pay the mortgage
  • Obtain easier finance – while it’s a little harder at present to fund developments, on completion you may be able to borrow 80% of the property value, which could be significantly more than your costs,  giving you better much leverage

Achieve great tax benefits – from your new property.

Adding all this up means that becoming a property developer allows you to acquire high-performance properties “at wholesale” (with built-in capital growth) and ones that are cheap to own.
This helps you build your property portfolio faster and safer than the average investor.

What is Property Development?

As of April 2020, the unemployment rate in Baltimore peaked at a high of 9%. Since then, the unemployment rate has dropped to 5.8% as of February 2021. While high rates of unemployment pose some risk for investors, present rates should not cause great concern. The high rate of unemployment over the last year is more than likely attributable to the COVID-19 pandemic and the industries impacted by it.

Baltimore has a large restaurant and hospitality industry, and this was one of the hardest-hit sectors during the peak of the pandemic. This is reflected in the 9% unemployment rate.

As the city moves forward with its vaccination goals, the rate of unemployment will likely drop as the restaurant and hospitality industry recovers. If you’re an investor in this sector, watching industry trends will help to guide your next investment decision.

What’s required of a Property Developer and why get into Property Development?

What’s required of a Property Developer and why get into Property Development?
In order for a Property Developer to be successful, you’ll need to have the ambition and patience that the process requires.
You’ll probably also need more knowledge than you may think – there are things you already know, things you know you don’t know, but as soon as you get into your first project you’ll also stumble on lots of things you didn’t even know you didn’t know!
As a developer, you’re an investor committing your equity, expertise, and talents to convert land from its current use to higher and better use.
So you’ll need to educate yourself on the property, the markets, economics, finance, town planning, the construction processes, and the marketing of real estate projects.
Some of this you can learn by doing your homework and other lessons you’ll learn along the way.
In order to be successful, you need to start small and work your way up.
Most of your mistakes will be made with your first few projects so it is important to start small so you don’t ruin your property investment career before it has even begun.

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