CLIENT BLOG: WANT TO GET INTO PROPERTY DEVELOPMENT?
The London Headshot Company had the great pleasure of shooting Mike Johansson's new headshots for Property Like A Pro. Mike then kindly shared his top 5 tips for getting into property development! Hopefully this will provide some inspiration for those looking to get into that sector!
Property development is a fantastic industry to be involved with. It tests and challenges a whole range of skills providing a hugely rewarding journey from start to finish. The reasons for getting into property development will be different for everyone. Some of us go the more traditional route of higher level education followed by a corporate career, whereas others will do this part time to provide a second income.
The beauty of property is that the barriers of entry are extremely low. Provided you can find a site and put together finance for a project, then anyone can become a property developer. We don’t need any formal training and it’s something which we can do part-time.
Fantastic right..?
However, this does also lead to the potential of lots of mistakes through inexperience and property usually involves large sums of money, which can be disastrous. Like any other industry, property development needs to be learnt and mastered, success does not happen overnight.
It doesn’t matter what route you take to get into property development, there are some fundamental do’s and don’ts for all of us who want to make a success out of a property development business.
Within this article, I will share with you my favourite top five tips for new and aspiring property developers to help you on your journey, and to help you avoid making the most common mistakes new developers make.
TIP 1 – EDUCATE YOURSELF
You would never try to drive a car without first learning how to do so..!
Property is the same.
Everyone who wants to get into property will benefit from educating themselves to provide a baseline of knowledge from which you can work from. There are some core concepts and ideas which have never changed throughout the years of property investment and development. These are fundamental to know, and spending money on yourself through education is a wise idea.
TIP 2 – YOUR PROJECT TEAM
When you are new to anything, you want to learn from the people who have done it before. This is especially true within property development. A property developer will have to carry out a huge range of tasks and skills, and it is unreasonable for us to think that we can master everything. With that in mind, the clever property developer will surround themselves by a good quality and experienced team who can help and guide the process.
All new developers will benefit from employing an experienced architect, planning consultant and project manager as a minimum for every project they do.
TIP 3 – KNOW YOUR NUMBERS
Arguably, the most important aspects of being successful property developer is to control and know your numbers. Property development involves huge amounts of money and in most projects we do not see any return until the very end, which can be years down the line.
Therefore, we need to have an idea of cash flows, how to track spending and how to set budgets. Being a successful property developer will mean spending a lot of time in Excel running financial models. It may not be glamorous, but this is where the profits made.
TIP 4 – UNDERSTAND YOUR MARKET
A common mistake many new and experienced developers make is to build a product which is not suited for the market that they are operating within. A classic example of this is building small flats in an area which is popular for families where small to medium size houses are in demand.
This may seem obvious, but we must build what the market wants, not what we think the market wants. Market research is critical.
By building and providing what the market demands means we are optimising our developments and giving ourselves the best chance for success.
TIP 5 – NETWORKING
Property development is an industry which relies on people and relationships. We want to work with people get on with and we want to do deals with people we like. Networking, whether we love it or hate it, is a necessary action for success within property.
Countless opportunities will emerge from people we have met along the property journey. From my own point of view, nearly 90% of the projects I currently work on have happened because I’ve connected with someone through a networking opportunity. Without putting myself out there and meeting these people, the opportunities would not be there.
So get out there, spread your property message and meet as many people as you can. You will be amazed at the doors which open.
SUMMARY:
So there you have five excellent tips to take on board your thinking about your property development business and how to progress forward.
These tips have come from years of experience working for some the biggest property developers in the UK. I now run my own successful and profitable property development business which has given me the opportunity to open up a hugely exciting online education resource, the PLP Academy.
If you want any more details about property development, how to make your business a success head over to my website I have lots of free articles, training, tools and downloads.
All the best,
Mike Johansson
