Development of real property. On our screens, we’ve all seen it done with ease, but is it truly as simple as they make it seem? Will being a real property developer be a good fit for you? And, assuming it does, how do you go about being a real property developer? This post will reveal everything!
But before we get into the nitty gritty of how to develop a Cyprus property, let’s take a look at what it takes to become a property developer.
What exactly does a real property developer do?
A property developer’s basic definition is simple: someone who earns a living by building new properties or modifying old ones for property. It’s quite straightforward.
What motivates you to pursue a career as a real property developer?
Despite the national press’s doom and gloom regarding the health of the housing market, the fact remains that the country requires additional houses. A great deal more. It makes little difference whether this takes the form of new residences, houses converted into flats, or simply making better use of existing space. What counts is that people need places to live, and with each passing year, buyers (as well as tenants) are growing more discerning. As a result of all of this, becoming a property developer may be both financially and emotionally fulfilling.
The fact that almost anyone can develop property is also a major benefit. There is a financial barrier to admittance for some, but there is nothing stopping you from obtaining formal degrees and training.
Will property development be a good fit for me?
While no formal qualifications are required for property development, it is prudent to put yourself to the test before beginning on your career as a property developer. The following are some important questions to ask yourself:
What’s your financial situation like?
Are you able to speak effectively with a variety of people?
Are you able to work under duress?
Are you a businessperson?
What is your level of risk aversion?
If you don’t answer these questions honestly, it could come back to harm you.
Quality Home Developers
Quality Home Developers is a Paphos-based property development firm that specializes in luxury premium properties.
Our goal is to help investors take advantage of the best property investment opportunities while also living the ultimate Island or European lifestyle.
Our core fundamental values are to provide quality, integrity, and a fresh, modern, innovative approach to real estate in Cyprus, as well as a team of skilled professionals with the knowledge, experience, and integrity to assist our clients with all of their property needs, whether they are buying a home or investing for the future.
Our mission is to provide exclusive, sophisticated, and luxury property projects in Paphos, Cyprus, as well as a team of competent professionals with the knowledge, experience, and integrity to assist our clients with all of their property needs, whether they are buying a house or investing for the future. To learn more please click here.
What are the potential dangers?
The last question, out of all of the above, is usually the one that distinguishes those who want to from those who should. Property development is a dangerous business, so keep that in mind before jumping in head first.
There are several factors that may work against you, including:
Changes in interest rates
Costs of building are rising (both parts and labour)
High-priced legal battles
Changes in the real property market or the overall economy
New rules are going into effect.
Work has been halted due to inclement weather for an extended period of time.
Making blunders (It does happen!) From overpaying for a home to squandering money on renovations that don’t add to the property’s total value)
Of course, there are techniques to reduce the hazards of property development, but it will never be a completely risk-free endeavor. Even simple renovations require time, and the longer they take, the more likely it is that things will go wrong.
However, for individuals who choose to pursue property development, the rewards can be substantial. You simply need to be aware that, contrary to what television producers would have you believe, property development is not the same as having your own money tree in the backyard.
What steps do I need to take to become a property developer?
So, you’ve completed our fast assessment, are aware of the risks, and still believe that property development is the correct career path for you. Great! Now it’s time to take a closer look at how to become a property developer.
Know your exit strategy and plan ahead of time
When it comes to property development, it’s always a good idea to start at the finish rather than the beginning. What exactly do we mean when we say that? Simply put, before you begin, you must know exactly what you want from your new development. You’ll be fully aware of the paths you’ll need to follow to reach your ultimate aim this way.
Before you begin, you should ask yourself two crucial questions:
Will the property be sold or rented after it’s finished?
Do you want to construct from the ground up or buy a “fixer-upper”?
Knowing these two elements can help you plan your exit strategy as well as the path you’ll take to get there.
Make a business strategy
After you’ve taken care of the foregoing, it’s time to develop a property business strategy. Working backwards and forming your development business strategy will be easier if you treat the two responses to the questions above as your general aims. Make your goals as specific as possible, and break them down as much as feasible.
You’ll need to cover the following in your business plan, which is required even if you’re putting up a property as a side project rather than a full-time business:
SWOT (Strengths, Weaknesses (Strengths, Weaknesses, Opportunities, Threats)
research into the market
How will you finance the venture?
What are your expected profits?
Who is a part of the project? (effectively, your company structure)
How will you obtain the property or land?
What is your development strategy?
How will you locate contractors?
Who will be in charge of the administrative side of things?
How will you deal with sales and marketing?
What is your departure strategy?
Work a financial plan
You can then move on to acquiring money for your project once you have a sound business strategy in place. There are several options available to you, some of which will be more viable than others, but the most popular include:
Bridging loan – For those who require finance while waiting for funds from another source.
Unsecured loan – Personal loans can be used for minor renovations, but they should be utilized with caution.
Secured loan – Useful if you need a significant sum of money, but it can be costly and puts your property at danger if you don’t work back the loan.
Residential mortgages are designed for those who intend to live in the property they’re building.
Buy-to-let mortgage – For people who intend to rent out their property after it is finished.
If your effort will result in property for business, such as restaurants or shops, a commercial mortgage is the way to go.
Complete your homework
This is something that everyone who is buying a property should do, but it is very important for developers. Some regions are more conducive to development than others, and some may have opportunities just around the bend that might significantly increase their worth if you work quickly (think Crossrail as a prime example).
However, doing your study doesn’t end with surveying the location and determining your key demographics. It’s also a good idea to learn about conservation areas, local government regulations, and anything else that could get in the way of your ultimate goal.
Know who you’re trying to reach
This brings together both your end aim and the research you’ll have done on the area you want to invest in, and it’s critical that you nail this component of your strategy. Knowing your target audience will develop you design your property to appeal to them, and you’ll automatically attract the right people when it’s time to sell or rent out your new development.
Another advantage of knowing who you plan to promote your property to once it’s finished is that you’ll be able to precisely estimate the expenditures involved. Remember that you are converting the property for folks who fall inside your demographic research, not for yourself.
Your ability to buy well will make or break your property development business, as obvious as it may seem. Many people make the mistake of thinking that the development portion is the most crucial, but buying at the appropriate price is what will actually help you out.
Another problem that new developers are prone to is the flurry of activity. Juggling more projects than you can handle may be exciting, but it is, in the end, a road to disaster. Make the most of what you have and don’t be scared to wait if the right opportunity doesn’t present itself when you need it. It will arrive, but you must remain in the game to take advantage of it when it does.
Don’t take excessive chances since you might never get another chance, so don’t do it!
Have a goal in mind
When looking for a property to develop, it’s critical to consider the following factors:
Know what you want to achieve.
Have a clear idea of how to get it done.
Adding value to the property you’re buying is the simplest technique for anyone building property to attain their end goal. This may seem self-evident, yet it is a skill that should not be underestimated.
View a number of houses and try to work out exactly what you could do to add value to that particular home to hone your ability to detect opportunities to add value. Would a loft conversion be beneficial? Is there any available land for construction? Is it better to deconstruct it and start over? Is it possible to turn this property into apartments?
The list of questions you may ask yourself is practically unlimited, but in order to be a great property developer, you must ask yourself the appropriate ones at the right moment.
Give us a call if you’re looking for a fixer-upper in Cyprus. We can assist you with your local area research and lead you in the direction of appropriate houses. We can also assist you after your development has been completed, whether you decide to sell or rent the property.