Property investing has long been appealing to individuals trying to diversify their wealth, or start a new business, thanks to the UK’s obsession with real estate. While Brexit and regulatory rules have clearly affected the UK real estate market, leaving real estate development less appealing than in decades past, it remains a sound long-term investment that may yield considerable profits if done correctly.
Furthermore, once the Brexit issue eventually settles, there are indications that perhaps the industry will recover substantially in the longer run.
According to data from Savills, an international real estate consultancy, housing and property values in the United Kingdom are expected to climb by 15% throughout the next five years, with significantly higher prospects in some places. According to the same study, market prices of houses across the North West are expected to rise by 24% in that exact time frame.
In this guide, we will be exploring ways you can set up a property development company in the UK.
Develop a business plan
To some degree, all business plans are the same – you must explain precisely what you aim to accomplish with your company and also how you propose to execute it (as detailed in our business plan template). You won’t have to delve in-depth if you’re developing a plan for private use, but if you are pitching for investment purposes.
If you’re trying to attract investors, make sure your plan is concise and focused on the most critical elements of your business. Include information on your organizational strategy, financial strategies, budgetary aims and potential returns, a building strategy, competitive and marketing analysis. It would be best if you concentrated on monetary goals since they will grab the most attention. Still, your market analysis will demonstrate the power and relevancy of your business plan and reassure your investors that their funding will be worthwhile, placing their trust in your business.
One of the most important business decisions you’ll have to make is running a business model that is buy-to-let or buy-to-sell.
With buy-to-let, you’ll buy a house and rent it out, then use the rental proceeds to pay down the mortgage – and make a little extra money in the process.
Though it may sometimes seem enticing, owing to the surge in UK property prices, which has created a vast and highly lucrative market for desirable rental homes in urban centres, you will surely be liable for the property’s maintenance, which includes repair and maintenance work, working with decking boards companies, and possibly even seeking renters and verifying their credit score. Rental agencies will handle most of this aspect for you, but they will charge you for their services, which will eat into your profit margin.
Buy-to-sell (sometimes described as property flipping) involves purchasing a property, holding it for a brief time, and afterwards reselling it. You’ll almost always have to purchase a property that needs to be repaired or upgraded, whether it’s updating the decking board or installing artificial grass, for this plan to work. Then you perform the necessary improvements or upgrades and resell for profits, taking into account the labour costs. The greater the amount of effort necessary, the greater the risk and possible revenue.
Top 3 Marketing Techniques for Property Development Companies in the UK
Set up a website and use social media to promote your business.
Whatever market you’re in, you’ll need a professional website and dedicated profiles on social networking sites like Facebook, Twitter, and LinkedIn to develop your digital following. These are comparatively cheap and can reach a large number of people.
You can also advertise your company on search engines like Google and Bing by purchasing advertising campaigns.
Incentivize word-of-mouth and referrals.
The most effective property managers earn many contracts through customer referrals. A new buyer or seller values a client referral the most.
New consumers, for example, are more likely to choose a real estate agent after being referred by a friend, colleague, or relative. You may always improve this strategy by rewarding the customer who recommends a new client with a referral reward.
We exist in a society that moves at a far quicker rate than it has in the past. Responding to consumer inquiries is critical; otherwise, you can potentially lose new clients.
You should always have access to social media via your phone or tablet and reply to client requests as quickly as is feasible. In the property development industry, you cannot delay till the next day to reply. It boosts your trustworthiness and integrity if you answer quickly.