How to become a property developer

Buying, renovating, and flipping houses has become a popular subject for daytime TV shows. And if you’ve been considering moving self-employment, our guide on how to become a property developer might help you decide whether it’s the right career for you.

  • What does a property developer do?
  • What skills and qualifications do property developers need?
  • How you can fund a property development
  • How much can property developers earn?
  • More support and resources to become a property developer

What does a property developer do?

To become a property developer, you simply have to make money by building new homes, or improving existing locations to increase their value.

Alongside new builds, you can renovate or convert existing properties, or buy and sell land which you have prepared for development. Profits can come from successful sales, or by renting out buildings to tenants.

Your daily tasks will vary depending on the type and scale of each project. You’ll need to work with builders and other contractors, architects, estate agents and surveyors, managing timescales, budgets, and deadlines unless you also employ a dedicated project or site manager.

If you choose to rent one or more properties, you’ll also need to attract tenants, and maintain the buildings for commercial or residential use.

Each project is likely to produce different challenges, from securing planning permission to unexpected delays or additional costs. It’s important to plan for potential complications, otherwise you could end up incurring a loss rather than making money.

Alongside developing the property, you’ll also need to be aware of house price and rental trends, along with interest rates which will impact any loans or mortgages you’re relying on.

How to become a property developer

What skills and qualifications do property developers need?

Anyone can become a property developer without the need for specific qualifications. But knowledge of the industry will certainly help you secure funding and avoid potential disasters, especially when you’re starting out.

Formal education focuses on various areas of the real estate industry, including surveying, property management or sales. Some of the recognised organisations offering qualifications include Propertymark, the Royal Institution of Chartered Surveyors, the Investment Property Forum and the Chartered Institute of Housing.

You can also pursue a BTEC and HND, or a university degree, in relevant fields such as surveying, urban planning, construction or property management, or real estate.

Whether or not you gain formal qualifications, you’ll certainly need to develop a range of skills to be successful, including;

  • The ability to spot areas on the rise, and worthwhile investments
  • Good communication and negotiation skills, including working with financial lenders or investors, those working on each project, and potential buyers or tenants.
  • Project management, costing and budgeting.
  • Building and interior design knowledge
  • Risk management, as property developments are large commitments which can involve serious consequences if they go badly
  • Patience and resilience to deal with any potential delays or complications

You’ll also need to either be able to pay for the land, properties and work yourself, or be able to secure the funding required.

How you can fund a property development

Unless you already have access to large amounts of money, it’s likely you’ll need to fund your property developing by borrowing a suitable amount. In addition to your proposed budget, you’ll also need a contingency fund to cover delays and unexpected costs. Typical fees include structural surveys, estate agent fees, maintenance, repairs, and stamp duty.

Options for funding include;

  • Residential mortgages: These are available if you plan to live in the property while developing it.
  • Buy-to-let mortgages: Suitable if you plan to rent the property after development.
  • Commercial mortgages: Lending to purchase a commercial property
  • Loans: You can choose between a secured loan against the property or other assets, or an unsecured loan more suitable for smaller projects. Bridging loans are also available if you’re waiting for funds to be released after one project has been completed, and you need to move onto your next development.
  • Partners or investors: It’s possible to develop properties with other partners helping to fund the work and secure additional finances, or with the backing of investors.

You can find out more in the IPSE complete self-employed mortgage guide, which covers topics including fixed, variable, interest-only and buy-to-let mortgages.

How to become a property developer

How much can property developers earn?

With any self-employed career, your potential income can vary a lot based on your skills and experience, location, and a wide variety of other factors. Any figures quoted are as a broad illustration of what you might expect.

The average salary for a property developer in the UK is estimated at £39,027 (Indeed), £45,000 (Talent), £49,726 (Glassdoor), or even £63,374 (Jooble). But it’s possible to earn much more or less, depending on the scale and number of projects you’re able to complete each year.

If you’re able to build a portfolio of successful sales and rentals, you can earn a much higher income, and being self-employed allows you to choose whether to take the earnings from your business or reinvest it for a larger reward in the future. There’s also no cap on what you can potentially earn.

Obviously, there’s also no guarantee of a profit, so many people choose to start with small, part-time property development around their day job or existing career.

More resources and support to become a property developer

Researching other freelance careers? Why not check out our other guides:

And you can get support and help if you’re starting out with self-employment, or still in the early stages of building your career, with the IPSE Incubator. The 12-month programme is currently free with IPSE membership, and includes advice, events, webinars, networking and more, tailored to anyone just beginning their freelance business.