Are you interested in becoming a professional property investor? Perhaps you want to boost your income with the right secondary investments? If so, then it could be in your best interest to become a landlord-developer.
In doing so, you can invest in properties, develop them and then rent them out to the right tenants. In this guide, we’ll explore everything that you need to know about this journey and the steps that you should take.
How To Be A Property Developer And A Landlord
Can you be a developer and a landlord? The answer is a resounding yes and it may be beneficial to explore this option over a more typical or traditional buy-let-investor. To become a landlord-developer, you need to make sure that you are searching the market carefully. Then, you can decide whether to develop residential or commercial property.
Once you have done this, you can develop a long-term business strategy or plan which includes financial details as well as a project timeline. This should be based on current industry projections as well as the latest news and figures.
After you have secured financing, you can then find the right site for your project, get planning permission and start construction work. It’s then just a matter of making sure that construction is completed in the right time frame and selling or leasing the property to earn a profit.
While this might sound complicated, a typical landlord-developer will buy a standard property that needs a little work. They’ll complete the necessary changes and then use it as buy-to-let accommodation. The entire process can be completed in a matter of months.
Once you start investing and developing property, you will become a landlord. As such, it is important to understand the rights and responsibilities that come with this title. For instance, key legal obligations include ensuring that your property is developed and maintained to the right health and safety standards.
You have the right to select tenants that match your desired criteria and do not bring significant levels of risk into your investment. However, you do need to be careful that you are not unfairly discriminating against potential tenants.
Due to the fact that there are so many rules and regulations around being a landlord developer, it’s important that you stay up to date with the latest market updates. Or, use a property consultancy firm to ensure that you are making the right decisions with your developments.
Of late, there has been a surge in the number of landlord-developers. The reason for this is that the government has a plan in place that includes making it easier to convert non-residential buildings into residential homes without planning permission on brownfield sites. These sites also provide the scale required for larger homebuilders and as such, there is less competition. That means that it’s easier and more efficient for new landlords keen to enter the property market. This is far from the only benefit to consider.
For instance, you will gain more control over your property investments. You’ll be able to choose and manage the property you invest in from day one. This can help mitigate risk and achieve specific industry goals.
It can also help you diversify your investment portfolio which will result in lower levels of risk as well. You will have multiple revenue streams from both new developments and properties you are already leasing or that are ready to sell.
Furthermore, by developing properties, you can ensure that they are more valuable and match the specific requirements of your target buyers or tenants. This means that you can sell or lease them for a higher price.
There are significant challenges of becoming a landlord-developer that you need to be aware of.
First, it makes property investments more complex overall. You have various aspects that you will need to manage personally or hire the right team for. This includes financial, legal and logistical processes.
There can also be higher upfront costs for developing a property and it can take longer to see a profit when you are starting out because you won’t be able to lease out the building immediately.
This is why you need to make sure that you understand the full complexities of this process and read as many books as possible on the subject. You should also be prepared to rely on the right services or hire a team that can help you with the key decisions.
Ultimately, becoming a landlord-developer can be a smart choice that will provide a rapid ROI and could be more favourable than a typical buy-to-let investment in the current economy. However, it does require more, planning, research and the right management to ensure success. That’s why you need to rely on experienced professionals to help you on your journey. As an expert property developer, John Howard can provide the support and advice that you need, regardless of your long-term goals, objectives, or financial requirements. If you’re looking for more information on how you can break into the UK property market, don’t hesitate to get in touch. We’ll be happy to assist you further.