Property Wire has a piece on the possibilities of making Property Development your “side hustle” – a part-time business while continuing your day job.

1. Introduction:

Small-scale property development is being seen as a lucrative side hustle with potential high profits. Unlike traditional investment methods, property development, specifically “flipping” homes or engaging in small-scale commercial conversion, can be a great way to maximize your investment.

2. Flipping Properties:

• What is it? – Buying a run-down house, renovating it, and selling it for profit.
• Profits: – The average profit during the pandemic was £48k per flip.
• Investment Needed: – Mortgage deposit of 25% plus renovation costs.
• Risks & Challenges: – House prices might fall, diminishing profits; renovating might take longer and consume a lot of time.

3. Small-Scale Development:

• What is it? – Converting commercial buildings like shops or offices into flats.
• Profits: – Targeting profits between £100k and £500k per project.
• Less Hands-On: – Unlike flipping, you can hire professionals to manage the work. It’s more about overseeing the project than manual labour.
• Role: – You become the project’s CEO rather than a labourer.

4. Financing:

• Development Costs: – You might need £300k-£400k, but specialist lenders can finance it.
• Deposit: – Minimum 30% to buy the commercial property, but most can be borrowed at attractive interest rates.
• Your Contribution: – Could be as low as £6k, but having £10k to £20k is recommended for flexibility.

5. Project Duration:

• Time Frame: – Projects can take 18-24 months from start to finish.
• Return on Investment: – A £6k investment might deliver around £100k profit over that timeframe.

6. Conclusion & Advice:

Small-scale property development offers substantial financial leverage and profits, but it’s not a casual endeavour. It requires significant investment, planning, and understanding of the market. Training and professional guidance can significantly reduce the risk, making it a potentially highly rewarding side hustle.

Key Takeaways:

• Flipping properties offers a more hands-on approach with significant profits but requires time and effort.
• Small-scale commercial conversions offer higher profits and require less hands-on involvement.
• Financing is available through specialist lenders, making the process more financially accessible.
• Training and professional support are crucial to minimize risk.

If you’re considering venturing into property development, it’s wise to weigh the risks and benefits, consult with professionals in the field, and potentially undergo training to ensure a successful investment journey.