Investing in property is viewed as a ‘safe option’ when it comes to making money. However, if you don’t have the initial savings to fund such a venture there are plenty of options out there.
House prices have been on rise here in the UK for several years now, offering entrepreneurs a tempting industry to get involved in. As we wait for the full effects of Brexit to take hold, experts from the housing market are suggesting that the property market is actually beginning to flatline for the first time in years.
This means that right now is the time to buy because once the political and economic uncertainty is over, it is almost guaranteed that house prices will steadily rise again. You can judge this on the fact that there were nowhere near enough homes for the ever growing population in the first place.
Property development ambitions in place it is likely that you will look for commercial finance if you are serious about starting a business. Lenders will take into account your financial circumstances and requirements in order to work out the best options for lending you the money you need to get on the ladder. Make sure your credit score is at it’s best as otherwise this could hold you back from getting started.
If you’re working to a tight budget you might want to get involved in the auction side of the property market. Property auctions can be a great place to find a house that you can sell for a profit, after a bit of renovation work. There are lenders that actually specialise in auction finance that are worth looking into, if you need to get your hands on the funds quickly.
Another way to fund your property development is to explore the public sector options. These include the Private Finance Initiative, Private Developer Scheme, Leasehold and Crown Build. They all come with their pros and cons but are all excellent ways into the property development market if you’re eligible for the funding.
Finally, if you’re getting into property development as a landlord you will need to consider a buy-to-let mortgage. Usually these mortgages come with a much better rate and lower initial deposit than an ordinary mortgage, perfect for someone trying to get on the property development ladder.
Once the funding is in place, it’s a good idea to find ways of keeping costs down. Jason Harris at First Urban recommends to start with your contractors, finding reputable people who offer reasonable prices. He also noted that you should strive to: “Build relationships with professional partners you can trust. The people you work with say a lot about you as a developer.”