When it comes to the idea of building a business, it’s safe to say that we need to be behind it. Becoming an entrepreneur can certainly be attractive, but it also takes a lot of work. It’s easy to look at successful entrepreneurs who are making it and want to follow in their footsteps. But choosing an entrepreneurial path isn’t the easy way to make money.
Getting into business is certainly a way for you to free up time, have more control over your income, and find satisfaction in what you’re creating. But at the same time, it takes work. Running a successful business can be a learning curve. It can be hard at times, take an enormous amount of energy in the early stages, and come with stress. But, if you approach it in the right way, it will often be worth it.
One of the first things you need to do to get started is choose a business idea and industry. While trends will come and go, one market that is successful year after year is property. After all, we all need somewhere to live!
Types of Property Businesses
Some options you have for launching a business in the property sector include:
- Owning a portfolio of properties and becoming a landlord
- Buying, renovating, and flipping properties
- Becoming a property developer
- Becoming an estate agent
- Owning holiday lets
- Owning and leasing commercial properties
- Buying and selling land or becoming a land agent
As you can see, many of these options fall into the categories of owning and renting out properties, buying and selling properties, and acting as an agent on behalf of others.
With this is mind, you can then decide what you want to do.
In this blog post, we’re going to predominantly explore the options you have when it comes to owning and buying properties. Let’s take a look.
Funding Your Property Business
While some startup companies can launch with next to nothing, this isn’t always the case when it comes to the property industry. In fact, it often tends to be one field where a lot of upfront capital is required. For this reason, you’ll often need a solid business plan.
Formulating a successful business plan is going to show that the business idea you have is viable. While you may not have tens (or even hundreds) of thousands to invest in the business yourself, you can look to secure funding.
If you do happen to have cash ready to use and invest, that’s great. But writing out a business plan and looking for venture capitalists or angel investors–particularly if you want to go into development or do this on a large scale–is a wise idea.
Purchasing property, covering fees and running costs, and generally getting the business up and running can be very expensive. So, it’s important to keep that in mind.
Purchasing BTL Properties
One of the first options you have is to purchase a property that you can then go on to let out. You may even want to do this over a long period of time and build up a portfolio. This would fall under the buy-to-let umbrella. Here, you can look to get buy-to-let (BTL) mortgages in order to secure the property and become a landlord. However, you will still need funding to start with.
Many BTL mortgages require you to put down a 25% deposit as a minimum. Yet, you can still look to get a mortgage to help with the rest of the funding. You just need to choose whether you want to get started as a limited company or purchase properties as an individual.
Operating as a Landlord
If you’re considering purchasing property to let out and building out your property portfolio that way, you’ll become a landlord in the process. Now, you may not want to manage the properties yourself–and that’s okay. Having a property management company take care of everything for you could be just what you need. But, you still have a responsibility as the landlord to ensure that your properties are safe. You will need to do EICR testing as part of this to ensure that there are no hazards. Another thing to think of here is keeping the property safe from any potential fires. Looking to bring in the correct legally required fire safety features is a non-negotiable here too.
You may also want to ensure that you have suitable landlord’s insurance in place. Of course, this may be something that you have as standard when first purchasing your properties, but you do need to ensure that you are covered as a landlord in particular.
Buying and Flipping Properties
Alongside building up a property portfolio or doing it instead of, you can also look to flip properties. This would involve you purchasing a property that needs work, renovating it to a certain standard, then putting it back on the market.
The idea here is that you would then make a profit on each property. You could then look to use that profit as a salary or put it towards purchasing the next one. It can be a great way to diversify your business in the property sector alongside growing a portfolio, or even as a stepping stone into development.
Getting into Development
Lastly, you may have goals of getting into development. In fact, you may even wish to pull together a solid business plan for this reason alone. Maybe you want to buy commercial properties, blocks of flats, or even buildings that go on to become hotels and luxury residences?
When that’s the case, you need to ensure that you’re focusing on the client who will buy from you, how long each project will take, and ensuring that you have enough cash flow to see the entire project through.
