When it comes to property investment and development, profit is the ultimate goal. But with many external factors at play – including economic conditions, planning hold-ups, and supply chain issues – getting deals to stack can be easier said than done.
We sat down with Rupert Lowe, our Head of Direct and a chartered surveyor with over 30 years’ property sector experience, to get his practical insights. Fundamentally, Rupert recognises that all successful businesses are underpinned by a clear strategy and vision, and property development is no exception.
With that in mind, here are Rupert’s six essential steps to identifying the most financially viable property investment and development and opportunities in today’s market.
Step 1: Define your target audience
From the outset, property investors should define who they are catering for before they even think about property type. Start by considering who you want to appeal to.
- Young professionals – typically prefer central locations and easy access to transport hubs and vibrant amenities.
- Over 55s - usually seek quiet and well-maintained areas, ideally in close proximity to supermarkets, restaurants, and medical facilities.
- Students - tend to favour Houses in Multiple Occupation (HMOs), close to universities/colleges, local transport links, and nightlife.
- Young families – typically prioritise areas with good schools, plenty of parks and family-friendly amenities.
Step 2: Analyse your target location
Once you’ve identified who you’re appealing to and their core needs, it’s time to drill down into the location, considering every possible angle you need to cover:
- Transport and local amenities:
- Is the property near bus stops, train stations and major road links?
- How far away is it from supermarkets, gyms, restaurants and green spaces?
- School catchment areas:
- Where are the nearest schools and what are their Ofsted ratings?
- Are there multiple primary and secondary schools to choose from?
- Local demand:
- How desirable is the area? What are the local rental and sales prices?
- Is the area established and quiet, or noisy and overdeveloped?
- Existing performance:
- Is the area highly sought-after or are properties taking time to sell?
- Is there any competition from housing associations?
Step 3: Factor in key financial considerations
To achieve profitable property investment and development, you must carefully assess key financial factors, including profitability metrics, plus costs and risks that can create unexpected financial burdens.
- Profitability metrics:
- Return on investment vs. yield vs. profit on cost.
- Property costs – price, Stamp Duty, Gross Development Value (GDV).
- Professional costs – solicitors, architects, planning consultants, sales and agent fees, arrangement fees, valuations, monitoring surveyors and renovation work.
- Unexpected costs and risks:
- Maintenance issues – such as damp, mould and ventilation.
- Landlord obligations – including licensing, insurance and rental reforms.
- Energy regulations – EPC rating requirements.
Step 4: Be disciplined and proactive
Property investment is a long-term game. It takes considerable discipline, determination and persistence to successfully navigate the market as it continues to evolve.
Due diligence
- Conduct thorough market research and location scoping.
- Ensure the finances stack up, including viability verification.
Network leverage
- Develop a network of contacts, including agents, lenders, and local professionals.
- Stay in regular contact, build strong relationships, and actively seek opportunities.
Step 5: Find and secure the right property
Having considered the above steps, it's time to focus on specific properties, considering your buying strategy and process to ensure success.
Buying strategy
- Auctions can be risky, especially if you get caught up in a bidding war, which can rapidly ramp-up prices.
- Look for off-market deals that can be identified by contacting and networking with local agents.
- Use Land Registry data to verify past sales and identify true property values.
Negotiation and decision-making
- Don’t rush into things. If the numbers don’t add up, be prepared to walk away.
- If a property has been on the market for a while, always negotiate a lower price.
- Base your decisions on future profitability vs. short-term appeal.
Step 6: Choose the perfect funding partner
Having identified your investment property – and ideally before – you should carefully select the right funding partner, to finance your purchase and costs of works, while providing valuable insight and support.
Choose a lender who is invested in your success
- Look for lenders who understand the property sector and genuinely want your project to succeed.
- Seek a funding partner with a strong track record of supporting similar property types and project sizes.
- Consider lenders who offer more than just capital – such as mentoring, project monitoring, and ongoing guidance.
Ensure flexibility and transparency
- Your funding solution should be tailored, transparent, and able to flex with your project needs.
- Choose a lender who is open about fees, timelines, and expectations.
- Opt for funding that aligns with your exit strategy – whether that’s refinance, sale, or retained rental income.
- Build in contingency and ensure your lender is on board with any changes in scope or timeline.
How CrowdProperty can help
Here at CrowdProperty, we assess properties from a long-term profitability perspective, as standard. We are extremely passionate about all the projects we fund and only provide funding for applications that are 100% viable.
We work closely with property developers to help them navigate every opportunity and challenge and ensure a smooth, successful project. We provide realistic financial projections and are here to support you every step of the way.
Call us today on 020 3012 0161 to discuss your property investment plans. We will happily share our own insights to help you evaluate and plan your project effectively. Alternatively, you can apply for funding in just five minutes and get an instant Decision in Principle* today.
*Instant DIPs will not be issued for projects where the loan amount is greater than £3.5m (or £3m if bridging), the profit on cost is below 5%, the loan amount is less than £100k, the loan term is greater than 24 months, if any required data is omitted, or the loan type is portfolio acquisition, special situation, planning gain or project refinance.
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