(Acknowledgement- this is an article copied from the website


From childhood days spent playing Monopoly, desperate to beat your friends to the desirable residences in Park Lane and Mayfair, to the countless number of home improvement shows currently filling up our TV listings, it would seem that we have become a nation of property addicts.

Property developers are no longer seen as unscrupulous shylocks cashing in on houses with dodgy fittings and fixtures and neither is it the sole preserve of the big companies, with plenty of cash to splash. It has become a  business that all types of people, with a reasonable source of finance, can get into.



You don’t have to be a financial expert to understand why developing property has seen a huge increase in popularity. While stocks and shares have gone up and down more times than Manchester City, over the last five years house prices have continued to increase. Added to the fact that we are now seeing interest rates at their lowest point for 48 years it would appear to be one of the few sure fire ways you can use money to make money.

Neil Lewis , property development expert and co-author of the ebook Property Developer Secrets says there has been a fundamental shift in how people perceive property development. “No longer is it the sole preserve of ruthless sharks but it has become an activity that most people can enjoy or take an interest in. Gone are the days when you’d whisper at the dinner table ‘I’m a property developer!’”

For those who are keen on DIY, or want to escape their day job, renovating a house can help provide an outlet for creative urges, pent up after sitting in an office all day. And it is not as if the sector requires any particular training or qualifications and neither is there a strict template for success.

Rather than having to struggle through any bureaucracy to obtain licences, or cram hard to try and pass an exam, you are officially a property developer from the day you sell your first house for profit.

Another factor it has in its favour is the lack of any necessary overheads. Mark Smith already has a thriving property company at the age of 29, Always Home Ltd. and the Birmingham-based firm now operates on a wide scale in both the resale and rental sectors. However in its initial stages, Smith was able to get the company up and running with little in the way of outgoings.

“Initially overheads were very low and therefore running costs were easily covered by the capital injected by the directors,” he says. “As most of the work is ‘on site’ at different projects, and not customer facing we didn’t need an office either.”

And, although Smith gave up his job for his new business, it is possible to become a property developer while still working. Rather than having to jump in feet first, you can support your fledgling business with your existing job, thereby minimising the risk.

By working evenings and weekends it is perfectly possible to find a house, renovate it, and then sell it on within a six month time frame. However, the quicker you want to turn in a profit, the more time you will need to dedicate to it.

“You can become a successful property developer alongside your existing job,” says Lewis. “However being flexible about when you’re able to view a property is crucial to getting the best deals. That’s why city bankers tend to stick to Buy to Let investments because it’s more hands off.”



Everybody knows someone who, during the current boom in   house prices, has made a small fortune, and day after day there are press articles decrying the lack of affordable accommodation, so clearly the market is out there.

Mark Smith of Always Homes Ltd is in no doubt that there is money to be made, “We have all read about this property boom that’s happening and our properties alone have increased value by well over 30 per cent in less than 12 months and I think there’d be a lot of unhappy estate agents out there if no market existed.”

But anyone thinking about going into property development should not expect to see such massive returns continue into the future. Whilst analysts argue on what is in store for the     housing market, it remains extremely unlikely that prices will continue to increase at such a rate. Although you shouldn’t let this put you off, more careful thought is required before purchasing that first property than you might have needed even a year ago.

The key to all this is research. You need to check out what is on offer, what you can afford, and the old adage still rings true – it really is about location, location, location. Like any new venture, you need to think of your property as a product, who’s going to be attracted to it, where they want to be situated and what will they expect, whether first time buyers or retiring couples.

Again it all comes down a good knowledge of the market which can only be achieved by research. Find out as much as you can from the internet, newspapers and estate agents themselves.

“You just cannot overemphasise the importance of research”, says Nicholas Leeming, internet property service Asserta’s director of key accounts. “You need to know what the demand is and don’t think that the first property you see is the one you’ve got to have – being impulsive is one of the biggest pitfalls and that’s why research is so vital.”

Leeming adds that it comes down to two very specific qualities: an understanding of the market and good judgement. “Don’t let your heart rule your head - be practical and don’t let yourself be rushed into a snap decision,” he says.

But probably the most important thing to remember to make sure your eyes are not too big you’re your wallet. It might seem like an obvious suggestion, but it is all too easy to go over budget chasing that ideal property and if the house market were to change you might find yourself without a roof over your own head. If you start small and move forward by building up experience from each project, and by learning from your mistakes you will be able to take on more and more properties with confidence.



Despite the old story that no  investment is as safe as bricks and mortar, like any new  business venture there is still and genuine level of risk involved. Perhaps in the past few years becoming a property developer would practically guarantee a great return, but now it is no longer such a sure thing.

“Over the last decade there has been a marked increase in capital values. Properties have been increasing by ten to twenty per cent a year and you would have to have been doing something seriously wrong not to make money” says Asserta’s Nicholas Leeming. “However that is simply not the case any more.”

And unlike other businesses, in property development when things take a turn for the worse, there are very few ways to cut costs or reduce overheads. When times are hard you could be left with a house you cannot shift, fast decreasing in value.

Another major downfall with becoming a developer is that you need money, and lots of it. The fact that  houseprices are at record levels which means you’ll sell for more, but it will also cost you more to buy. So unless you plan investing a lot of time renovating a really run down property, a source of finance is a must. And because of such high prices, until you make your first sale it’s often impossible to grow or expand.

“Finance is a major obstacle because until there are sufficient funds in the coffers, you can’t really do much except be patient until there is,” says Mark Smith of Always Homes Ltd “At the start it was difficult to find lenders with a reasonable interest rate, or investors.”

It’s clear that becoming a property developer has the potential to lead to significant reward, and with the right research and some level-headed judgement you could have the right foundations to build a strong business venture. But remember, in property development timing plays a huge part, and you need to be able to judge whether now is the right time for you.



Just because you might have lived in rented accommodation does not mean you have fully understood what being a landlord is all about e.g. they tend to be there when the rent is due but not when things needs fixing. But the stereotypical image of rent books and rising damp is now being replaced by rising numbers of entrepreneurs who see buying-to-let as a great business opportunity.

On paper, it would seem like a way of making significant returns on an investment as well as an attractive career option whether for those who might be coming towards the end of their working lives or who just want to bring in an additional income.

However, buying-to-let is no get rich quick scheme and at present it would seen to be a case of too many cooks spoiling the broth. With its growing popularity the market has recently begun to look a little shaky. In London, rents have already begun to fall and other major centres areas across the UK are full to the brim with rental properties.

To ensure the property will pay off its important to weigh up its potential to make money both now and in the future. Buy-to-let investors need to carefully assess the types of people who would be attracted to the property.

Consider its strengths and weaknesses compared to similar properties and, while the advice of your estate agent will be of some help, they are only going to be looking at the short term and will not necessarily be thinking about an investment that is going to bring in money well into the fufure.

Buy-to-let investors also need to add into the equation the fact that the property will not always be rented for 12 months a year. Even if you do find the ideal tenant, there is no guarantee he or she will stay for a long time thereby guaranteeing you a solid monthly income.

And of course there’s the additional costs both in time and money of maintaining, running and furnishing (if necessary) the property all of which need to be taken into account. Of course you can employ a management agency to help cut down on the hassle of finding the right tenants and then dealing with their problems, but they will take up to 15 per cent of your rent for the privilege.

For example if you were to buy a £185,000 two-bedroomed property to rent in North London, the figures might not be quite what you would expect. An estimated £1000 a month rent with an average of one empty month a year would leave you with a annual income of £9,000.

Once you have deducted costs, including the management fee in some cases, furnishings, maintenance and repairs this figure ends up nearer the £6,000 mark. Whilst not to be sniffed at, this means you would need to be paying significantly less than this on the mortgage for the property over the year before you begin to see a decent profit.

From these sort of figures it’s clear that buying-to-let, like stepping out on any new career, still requires a thorough examination of your personal finances. Rental income needs to outstrip mortgage interest payments by between 25 and 50 per cent because if there is a gap in the rental period you will have to stump up yourself. Could you afford to pay both the loan on an investment property and the mortgage on your own house if you had no rent coming in?

While buying-to-let is clearly a viable business opportunity don’t rush into a rental property and end up overstretching your finances, because the returns may not be as much as you think.


It’s an uncertain time in the  housing market with many experts at odds over what the future holds. But if you do decide to take the property plunge it might be worth remembering these key tips.
Rent and sell - it is important to buy a property that is suitable for both resell and rental, so as to maximise your opportunity for profit. The two markets do not necessarily go in the same directions, as is the situation in London, often as one declines the other will pick up.
Location, location, location – even in bad markets the properties with the best locations sell well so look for good access to transport even in the cheapest of areas. However it is important to remember different people value location in different ways so, for example, young professionals want to get into town quickly but families with children tend to avoid living by main roads.
Flexibility – make sure your  finance package allows you to change your payments if your property takes longer to sell or let than expected. This will help ensure you don’t find them stretched too far.
Don’t rush – take your time to get to know the market and the area. Don’t let estate agents push you for fear of missing out on a good deal or over worries that prices will go even higher.
Get moving – however when you’ve found the property you think has potential don’t hang around. Find a conveyancer who can turn things around as quick as possible.
Renovate – budding Lawrence Llewellyn-Bowens will just have to keep their creative urges in check because the way to decorate a house so it will sell will not necessarily be one that matches your own personal tastes. Neutral colours and plain decoration throughout tends to get the best results.
Don’t get carried away – decide on how much you want to spend and then stick to it. How many property programs have you seen where they go wildly over budget? Well - learn from it!



If we can assist further, please email TotalAccounting as follows: