Home » Real Estate & Property » Top 10 Questions to Ask Yourself Before Becoming a Property Developer

Making your decision to become professional property developer and purchase property isn’t any easy step. Could it be one that will require a lot of thought, consideration and time to make sure you are making the right decision.

In the event that you too are struggling to decide if property development is the right route for you, then your following FAQ might help put all your concerns to rest:

1.What is property investment?

There are many misconceptions about property investment and what it exactly entails. The most common route you will encounter – and hear of – is renovation, where you get a property with the purpose of carrying it out up and selling it.

However, whilst this niche was profitable during the property boom of 2007, this investment technique unfortunately is less effective during economic downturns. That is if you ‘ve got the bucks to turn the property around fast and quickly obtain it back on the market.

Another route however – and usually the one we recommend to you – is buy-to-let. With buy-to-let, you are able to purchase property based on the areas tenancy demand and ability to produce positive cash flows, and generate month on month incomes simply by leasing your property development to tenants. There is no need to sell…

2.What makes property investment dissimilar to stocks, bonds or shares?

The fact that it won’t ever go into zero values! House for sale in DHA Lahore Although stocks, bonds and shares can allow you to experience annual returns all the way to 25%, they are also susceptible to dipping down to -8% leaving YOU out of pocket.

With property it is just a much different story. Even yet in a recession, properties can still produce annual returns all the way to 25% – in the event that you invest correctly – which makes it a much safer, more stable investment route.

3.Do I need capital to invest?

No. Equip yourself with the right strategies, and it is possible to invest in property using little if many money and purchase properties without putting your own personal home at risk.

Investment strategies such as No Money Down or No Deposit Down are specifically made to assist you invest with minimal costs involved. Whatever you will need to worry about is the legal fees and stamp duties; yet even then it is possible to negotiate such property discounts that your property will essentially purchase itself.

4.Do I need experience?

Despite what the media want you to trust, you do not have to own prior property investment experience to create a make money from property.

The key to achieving long term successful investments is always to: equip your property portfolio with the right investment strategies; negotiate the right property price discounts, but more importantly ensure that you simply purchase properties that may produce the positive cash flows and tenancy demand you need.

Attending a property development course can help equip you with such investment strategies. Just ensure that you thoroughly research these property development courses first, check their history/case studies and only sign up to a class that could offer you at least 5 investment strategies.

REMEMBER: Not all investment strategies works in every financial climates, which explains why having plenty of preference can come in handy.

5.How do banks lend money for investment property?

Unlike applying for a mortgage where your lending amount is founded on just how much you earn, buy to let investment is assessed very differently.

Here, all lenders require is that your property has the capacity to generate 125% of its mortgage repayments through buy to let. Meaning choose wisely and it is possible to invest in bigger and better properties, than you normally would manage to if it was based on your own salary.

6.What are the very best properties to invest in?

There is no fixed rule to the exactly, although residential properties do primarily win in the investment stakes against commercial property and land.

If you are researching potential property developments, the key points to take into consideration will be the properties tenancy demand; the mortgages deals available and the positive cash the property can generate. Provided that there’s the demand and the property can produce at least £300 in positive cash flows, then it doesn’t matter if it is a terraced, semi-detached or detached.

These details aside, economic circumstances could make one property type popular compared to the other. Throughout the recession like, studies unearthed that tenants preferred residing in terraced properties compared to any or all other property types because these were better designed and more energy efficient.

7.What is positive cash flow?

Positive cash essentially represents the income remaining from the tenants rent following the properties mortgage repayments have already been deducted. So, the more expensive the properties positive cash flow, the more profitable the property is.

8.Is it possible to invest in all financial climates?

Yes. If you’re looking to enter specifically into the buy to let investment market, then with the right investment strategies, brokers and negotiating skills, it is possible to invest come property boom or economic crisis.

Take the recent recession. During the last 2 years we’ve been met with property price discounts of at least 20%; base rates of only 0.5% and a tenancy demand that’s increased by 24% alone over the last quarter of 2009.

However, despite having the property boom of 2007, property investment was still powerful asset since it encouraged rapid capital growth which often prompted rental increases and larger positive cash flows.

The financial climate does not need to play an issue in your decision to invest; only allow you to determine which of one’s investment strategies will be most effective.

9.Is it possible to invest abroad?

Your property portfolio does not need to remain restricted within one city, region or country. UK, USA, Europe or Australia… with the right strategies all properties may be transformed into credible property lets.

The thing you should be cautious about when investing abroad is familiarising yourself making use of their property laws and investment regulations. Every country is formatted utilizing a different system, and will employ different methods for lending, organising repayments and structuring property leasing.

10.Do I have to give up my day job?

No, not even close to it. The best thing about property is that it is simple to research, invest and build your property portfolio in your free time – for less than 1 hour property each week – and continue working your day job.

You can also employ a property manager to look after your properties, and ensure that your rent; maintenance issues and tenant problems are quickly resolved without importance of your assistance.

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