What should you consider when starting a property business?

According to Halifax, property prices rose to £293,999 in October. It is more than they were in 2022. Similarly, mortgage rates are increasing. According to Halifax’s head, “house prices have reached heights again in the current climate situation.” She continues, “Individuals continue to approach mortgage despite rising house prices.”

It is the prime reason behind increased interest among new entreprenuers. However, not every startup succeeds. It is a detailed industry and could prove challenging for new entreprenuers. Most business owners focus only on the financial aspect. They invest more towards increasing the revenue. However, finances alone may not help achieve a vision.

Bart-Jan Leyts, CEO and Founder of Otamiser and Autorank says,

 “While launching a Prop-tech startup, one must look beyond financial projections. Investment is more about finding the right people. They will help turn your vision into reality. Having a dedicated team of investors and people helps you navigate the challenges without worries. Thus, focus on assembling a good team and investors who are passionate about your vision. It will help you achieve success.”

Thus, starting a property development business is challenging. You must weigh your options before entering the industry. It could be challenging to navigate things as a beginner.  However, the blog states the best strategies to consider while starting a property business.

5 strategies to kickstart a property business successfully

The most important aspect to analyse is- willingness. How willing are you to start the property business? Starting your company requires commitment. You should be emotionally and financially prepared.

You should have the required cash base and business plan to succeed. It should be relevant to the industry, goal-optimised and realistic. It must have the right financial projections. Here are other aspects to consider when starting a property business:

1) Type of property you want to deal in

You may spot unique types of property segmentation. Rental properties, commercial Real estate markets, and fix and flip projects. These property types feature the most potential. Each property type offers unique benefits and risks. Thus, analyse your interest, expertise and industry growth. It will help you choose the right one.

I. Retail and Commercial properties

It involves shops and offices. You can invest in the existing or prepare a new property.  Office construction is one of the most popular types after terrace housing. Thus, you may benefit from this. You can operate as a property manager, real estate agent and property developer.

II. Residential property

It includes managing or constructing Student accommodations, rentals and holiday lets.  The rental market is ever-growing.

As per the Office for National Statistics reports, “Average UK private rents increased by 8.4% in 12 months until September 2024.”

Moreover, the market may grow by 21% by 2028. Thus, you can invest in Buy-to-let property construction or management.  

III. Specialist services.

It is a service-based property business type. For example, you can operate as:

a) Property management company

It is managing every property aspect. It may include tenant screening and maintenance.

b) Property surveyors

It is about providing professional advice regarding property purchases or investments.

c) Property solicitors/conveyancer

It is about managing legal documentation and aspects regarding property transactions.

2) Identify the gap in the market

Most startups aim at solving problems that don’t exist. You cannot win like that.  Let’s understand it better in the expert’s words. Liv Conlon, Owner of Propertystagers.co.uk and StagerBoss, says:

“Identifying the gap in the market is important before launching the business. It should address a real problem that exists in the market. View it as an investor, buyer or seller. Invest in flexible technology to remain on top of changes. Develop partnerships with prime stakeholders. It may include real estate lenders, mortgage agencies and tech providers. It will help optimise your services to serve the customers. Lastly, build a personal brand to establish your firm. The founder should create educational content like podcasts and interviews.”

3) Create your financial strategy

Residential property business is cheaper than commercial one. You can benefit from investing in commercial property.  However, you need some cash backup to operate successfully. Identify your cash reserves. Operating with a partner is beneficial here. It helps split the financial responsibilities. However, you can check external financial assistance to grow.

For example- consider loans with no credit check for your startup. It may help you finance your basic and immediate business needs. It doesn’t involve detailed checks or affect credit scores. Consider it for urgent payments or inventory. Moreover, you can pay the dues with easy instalments. It is ideal for new businesses with limited cash flexibility.

4) Comply with the industry standards

The standards and law compliance rules differ according to the property type. It could be different for buy-to-let or office construction businesses. Here are some licenses that you must ensure to start the business in the country:

i. Real Estate license procurement

It is ideal for individuals and members of organisations like-

• RICS
• NAEA
• The Guild of Professional Agents
• The property Ombudsmen

Collect your licensing certificate from the organisation if you belong to any of these. Partnering or affiliation with such companies establishes credibility. It is the route to grow your business quickly.

ii. The Real Estate Acts

This license ensures that the business operates in the best interest of clients and property holders. It lists the responsibilities of the real estate agent. For example, an agent does not have any right to:

• Receiving the amount on the client’s behalf from a property buyer
• Drafting contract for the property purchase
• Sign contracts on the client’s behalf (unless told to do so)
• Draft statements from clients or buyers while selling or buying a property

These are the legal duties of a solicitor. Hence. You cannot engage in the stuff. It is legally prohibited to do so. You should also analyse the Land Registration Act of 2002.

Procuring such a license involves screening, documentation and approaching experts. The property consultants may help define the document requirement to get certifications. A minor mistake can delay the approvals. It affects your other financial engagements and business needs. Thus, prepare a budget before approaching the experts. Identify the expected costs and scan the availability.

Moreover, you must ensure some flexibility to meet urgent cash needs. If you fear losing the deal due to low or inflexible cash, don’t worry. Explore business finance with no credit check flexibility. You may spot multiple options for help.  It is an instant way to finance their requirements. You don’t need to worry about the document hassle or assets. You can qualify without engaging in such stuff. Just finalise the best expert to seek a solution. Tap the funds to fund the fee and meet business goals. It is the best solution to your financial hiccups. What could be better than getting quick cash without delay?

5) Identify property investment opportunities

Identify the right locations with rising property prices. For example, Yorkshire, Humber, and Wales are the prime commercial locations in which to invest. Property prices are rising in these cities. According to Healton Group, “Manchester is the city with the highest yield in the UK.”

It has an average yield of 12% in M14 postcode. It covers areas like Fallowfield and Rusholme. Students and young professionals are your prime audience here. Additionally, analyse old properties with renovation potential. You can renovate and sell for a better price later.

Bottom line

Starting a property business requires analysing multiple aspects. It is not just about finances but other things, too. For example, you cannot do it without a good team or technical assistance. Moreover, you need a strong business plan to grow without obstacles. Thus, the above-listed aspects may help start a well-educated property business. It helps counter any challenge to operating within one.