The television programmes make it seem so easy: "Sarah and Dave bought their property for £50,000 last year and with a lick of paint and a new floor it's now worth £4m." But, while being a property developer might make you a fast buck, is it as easy as the makeover shows like Property Ladder make it seem?
Louisa Fletcher, 33, bought her first house at the age of 19 and has renovated several since then. Her progress in the property market has meant that she is in great demand as a TV expert and public speaker. But, she says, many of her own achievements are down to being in the right place at the right time.
"You have to remember I got in at the start of the rising market and it was a great cushion," she says. "That's not to say that you can't be a successful developer now, but those easy times are over. Banks are now less likely to lend money and take a risk, so you really need capital behind you."
The best way in is to start simple, says Fletcher. A general rule of thumb is that houses are a better bet than flats. A house has a much broader appeal – single people, retired people, couples and families can all live in a two-bedroom terrace. "That's not the case with a two-bedroom apartment," she says. "So all of a sudden you have halved your target audience."
If you want to be successful at property development, you really have to focus on it. That means planning the project, creating a schedule of work and sharing that with contractors. "You can't let them submit an estimate which just runs on and on without concern for time or money," says Fletcher.
It's not enough to be a big fan of interior design. Fletcher says one of the most common mistakes property developers make is to over-personalise a property. "You can't just say, 'I love those coffee-coloured bathroom tiles,' and stick them in. You need to make a sale property as 'vanilla' as possible. You need to remember that you aren't actually going to live in it."
Most property developers aim for a profit margin of at least 20 per cent. One of the easiest ways to make a relatively fast profit is to buy off-plan in an up-and-coming area. That way you cut out the expensive stages of the development and get the property at the cheapest price.
Manchester developer Lawrence Whittaker entered the property market 10 years ago. He says: "My brother and I used to sell prestige cars until our father said that selling cars might make us £1m but property would net us £10-£20m easily." He heeded his father's words and sold everything he had to invest in property.
Over the years Whittaker has bought and sold and also built properties with his development company Dylan Harvey and its sister investment company Lawrence Harley, which specialises in making property investment simple, lowering solicitors' fees and mortgage valuations.
He believes that with the right start anyone can be a property developer. "To invest in a residential property, all Lawrence Harley requires is a 5 per cent deposit payable as a £2,000 reservation deposit, followed by the rest of the 5 per cent within 30 days."
If you decide to buy and renovate yourself, you probably own a property already. Property development is not a career for a school-leaver or recent graduate. Most new developers tend to combine their first project with their day job, working all their spare hours sanding floors and traipsing round the DIY store. Most developers will tell you that their first project almost put them off for life.
"You can make a career out of it and it can be extremely rewarding. Just make sure you are organised and prepared to work hard," says Fletcher.
Tips for becoming a developer
You don't need any formal qualifications, just a keen eye for a profit and a strong work ethic.
If you want to start at the bottom and work up, some universities are offering degrees in property development. The University of the West of England runs one, as does the University of Portsmouth.
You can take short courses in practical building and property renovation at The DIY School in Stockport ( www.thediyschool.co.uk).
Identify an area that has room for growth, rather than one which is already highly desirable.
Start small. Don't choose a dilapidated mansion as your first project.
Stick to your budget.
Don't get too involved. You're renovating for profit not love.
Don't pay too much for the property or land and always try and stay within your budget.
Contact a property investment company such as Lawrence Harley.
Visit the Property Investor Show at Birmingham's NEC on 12 and 13 April for advice and forthcoming developments.Reuse content