How To Get Ahead Of The Competition As A Property Developer
Last updated 06/10/2019
Nowadays it can seem like everyone’s got a stake in the property game.
From retirees looking to downsize to would be developers dazzled by slick tv programmes, it can seem hard to make your mark in such a crowded market.
But we’ve got plenty of tips for that - so read ahead to see what can make you stand out from the crowd!
Use tech to your advantage
Proptech has come to disrupt the old style of property and it’s here to stay.
According to research conducted by KPMG 93% of property organisations believe that: “Traditional real estate organisations need to engage with proptech companies in order to adapt to the changing global environment”.
Despite this, only 44% of them said they have a business wide digital and technological innovation strategy.
If you want to get ahead of the curve, you should scan all your favourite property and business websites for their info on the proptech industry.
After all, you can’t create a successful strategy without getting informed first.
For example, here are some of the trends that Industry giants like Savills predict will define the next few years:
- Stacks of Solutions: With the number of Proptech startups only set to expand, they each need to tackle different industry niches in order to stay relevant and stay afloat.
As they each discover their specific profile, they’ll create their own ‘stacks’ of business solutions.
This will push the industry out of isolation and into one that uses a wide variety of platforms to collaborate.
- Smart Housing: From intelligent control systems to keyless entry systems, expect to see smart home innovations only become more common in the coming years.
These features will help developers differentiate between schemes in the marketplace.
- VR: CGI’s and digital videos have now become the norm when showing off property for prospective buyers.
VR is now becoming the one to watch, as estate agents will be keen to market properties to buyers who won’t need to see it ‘in the flesh'.
- Fintech: It might be a good idea to look at recruiting some of your staff from Fintech.
As Fintech and more established tech markets are becoming over saturated, more and more people will be looking to change industry.
Proptech should take full advantage of this talent pool and their financial literacy.
The pool of digital property resources is always expanding, and not everything survives, but we’ve made a small list of the top of the crop:
- Houzz: It’s only been around for a little while, having been minted with the ‘best app’ in the 2016 Google Play Awards.
It’s a fountain of knowledge where architects, property experts and interior designers put together moodboards of their project and gain ideas from each other.
It’s a fantastically diverse platform with loads of HD images to help you design your property for your ideal tenants.
You can figure out your designs by using filters like style, budget and room type.
This is quickly becoming a godsend for SMEs in the property industry.
- Use AroundMe and Crime Map England and Wales to get a better idea of your local area.
AroundMe identifies the amenities near you such as restaurants, banks, hospitals and stations.
Even better, they often come with reviews you can see what the locals really think.
Then The Crime Map app does exactly what it says on the tin. It lets you know of any crime or anti social behaviour in your area.
You can even compare it to the national average.
- The Lendinvest Digital Academy: Born in 2013, this company’s recently launched Property Development Academy quickly proved itself to be one of the best resources for aspiring developers.
This online version brings together all the best bits of information, based on course modules and supplied from academics and industry professionals.
If that’s not enough for you, they also publish research on the UK Buy-to-Let Market every quarter.
This is where they rank the best postcodes for buy-to-let across England and Wales.
These reports take into account liquidity, capital value growth, rental yield and rental growth in every area.
Love the locals
Wherever you call home, think of investing closer to it.
While cities like Manchester, Leeds and even Norwich are all up and coming property hotspots, there might be more value than you think in your own backyard.
Besides, going closer to home means you’ll be more likely to view your developments one on one and have a more hands on approach to your due diligence.
While you’ll have to do your due diligence, there’s seldom an area which has had no investment at all put into it.
Wherever you are, you’re likely to find at least one upmarket area or regeneration attempt.
In fact, sometimes doing the research will end up surprising you.
Even towns as uninviting as Grimsby are being pitched as areas of untapped property potential!
The range of areas with development potential will only increase as the property market starts to sprawl out of overstuffed London.
Wherever you are setting up in a new area, never exclude local knowledge from your list of resources.
While newspapers are often where the concrete developments are reported, you can always count on the locals to have opinions on the developments and amenities in their area.
Plus, the local buzz is a great way to understanding how businesses and transport links are doing - a glossy press release and local expertise can tell you 2 entirely different things!
Get adept at auctions
Mention an auction and most people will think of the clash of the hammer and some cheesy property shows.
But they’re also an excellent way to access property.
You'll see a wide variety of properties, from homes that need renovation or refurb to blank slate land sites.
Get ahold of the catalogue early so that you can research and troubleshoot - is the property in a problem area?
Will this property remain a good investment further down the line?
You’ll need to enter the room armed with a plan and a poker face.
You can’t get caught up in the action of a bidding war only to see that you’ve landed a prize turkey.
You shouldn’t bet until you’ve assessed your competition’s strategy, and put in your first bid at the last possible moment.
Even if the property doesn’t research the reserve price, you can always try to negotiate with the seller one on one afterwards - they wouldn’t put the property to auction if they didn’t want it to sell!
Keep thinking creatively
Everyone knows about buy to let, and even that strategy has some problems.
Don’t see unusual property ventures as too scary to give a try.
No one got anywhere in property without ambition and conviction!
You could try buying repossessed housing.
This can lead to a surprisingly good deal because of how quickly it needs to be sold and within a set time frame.
This means the seller is more likely to be persuaded to negotiate and perhaps even to undersell to get the property off their hands.
Short lease properties, properties close to the stamp duty threshold or even problem properties - those that seem a little ‘grungy’ - could all prove to have rich sources of potential profit.
Follow development trends
If you want to get ahead in property, then it won’t be enough to just identity what interesting new builds have come to your area.
You’ll have to find out how it got planning permission to get built in the first place!
You can find this information on local authorities’ websites.
This will often give early indication of areas with the most long term investment potential.
Any indication of major housing schemes trickling into an area can proceed a ripple effect of new developers even years before those initial developments are on the market.
Where planning permission has been granted for major housing schemes, there is often a noticeable ripple effect years before the developments have actually been built.
It might also be useful to track if there were any objections or delays and what infrastructure payment was given to get the property off the ground.
You can also try to look into what their contribution to the community infrastructure levy was.
Build sources and referrals
Every good developer needs a strong network.
You should use your existing contacts and create new ones in order to get ahead of the game with upcoming property development opportunities.
Your links with solicitors, councillors and estate agents etc. can prove invaluable as they can let you in on some of the freshest new opportunities while they’re still hot!
And don’t forget sourcers.
They’ll have a number of developments balanced at any one time.
Whether it’s buy to lets, HMOs, and development opportunities ready to go - cutting the time and hassle invested in half!
They do charge a fee for their services, and it usually comes to about 2% of the purchase price on your development - so you’ll need to do a thorough background check to reassure yourself your money’s in safe hands.
Define success your way
Don’t let yourself get complacent.
Many developers rely on market performance to make their profits happen.
While property is a remarkably resilient business, it also changes very quickly.
By the time that you’ve finished your brand spanking new development, property prices might have gone up - meaning you could make a bigger profit if you didn’t exhaust yourself to get the property done as soon as possible.
You should always measure success on your actual development work rather than the changeable condition of the market.
You can’t afford to forecast your profit on future house prices that might never come to pass.
The property market is notoriously fickle and can change in any direction.