Being a property developer is an interesting business which can earn you a good income, covering both building projects and renovations. Obviously there are certain things you must do in order to make the maximum profit, such as finding the right location. This does not necessarily mean looking to invest in the best postcodes or in the centre of town. Here you'll pay a premium for the properties without necessarily maximising profits. Being near schools, public transport and open spaces are all essential when selling a property. Knowing the area can help as you may be able to spot the next up-and-coming district, so you can buy low and sell for a handsome profit. Search online to see what the average price for properties is in that area. Also cost in any additional expenses such as stamp duty, solicitors, search fees and renovations. Then you can work out your expected profit margin.
If you are renovating, think about who is most likely to buy your property - is it a student area, an area populated by young professionals or mostly populated by families? Bear this in mind when carrying out renovations. For instance, families might prefer a large, fitted kitchen while professionals may prefer high-tech gadgets and quality fittings.
Making Your Money
You make your money when you buy a property rather than when you sell, so it is important to pay the right price. Try to knock as much off the asking price as you can without risking losing the sale. Also, look for properties which can be expanded or renovated. You can often pick up bargains at property auctions. Don't start the bidding but wait to see what other people are doing. Set yourself a limit on the most you are prepared to pay and wait until the auctioneer is ready to close the bidding to put in your first bid. If a property does not reach its reserve price, see if you can negotiate with the seller. They would not have put the property up for auction if they were not keen to sell in the first place.
Key Market Indicators
Keep an eye on the markets to see whether interest rates are likely to rise, whether employment prospects are good, whether inflation is set to go up or down and what the 'feel-good factor' is like. Then you will have an idea of how confident people are feeling about the property market. Keep an eye on the news too, to see if any major developments are on the cards. If a Waitrose supermarket is set to be built in an area, it would be wise to buy if the price is right. Having a Waitrose nearby can boost house prices by more than £36,000.