Property development as a career - thoughts?

[whenyouknowyouknow]

Hi Mumsnet,

TLDR - AIBU to want to make a career for myself from property development.

DH is a self-employed property developer - that is his full time career and he has done very well out of it.

I have a career in the 'professions' but am considering switching to also become a full time property developer.

Reasons for this being increased flexibility, self employed, better income etc. No DC as of yet, but I imagine that the increased flexibility will also help if and when they come along.

My questions to you MN are:

• Why do people some people consider this an illegitimate career choice?

• I am aware that some people think this is unethical, but not fully aware of why?

Thanks in advance for any thoughts/musings

Bump!

People tend to have an issue with it because it’s got such tight margins that so often corners are cut, the finish is pretty poor and rarely snagging lists are fixed

From a cash flow perspective, I’m sure it’s pretty tricky too to have to pay stamp duty every time

Yes I can see that point. I would not be cutting corners and the properties will be finished to a very good standard. Having rented for a number of years I understand first hand what it is to have a crappy landlord!

Also stamp duty not an exciting prospect but a necessary business expense I suppose!

I imagine some people object because it's perceived that people with money are snapping up cheap houses and doing them up to sell off just to make a profit when someone else could benefit from living with a smaller mortgage and less finish.

Don't you need a lot of capital? Wouldn't it be quite stressful with deadlines and large amounts at stake to deal with if you had a baby?

DH & I have are 'in' the property sector I suppose. Never thought of it as a career, more just what we fell into doing!

We buy cheap, otherwise unwanted properties that are usually unmortgageable and either rent them to lovely families (at discount rent so they can save up) or we sell for a profit if they're not good rentals.

It's hard, hard work and nothing is guaranteed. Our lives are not compatible with having kids, as we live in each latest house as we rennovate and do the work ourselves.

Nothing is guaranteed, there's always unseen costs, everything takes so much longer than you think to do and the market is slow at the moment. But I love it! I'm addicted to transforming spaces and really enjoy being a landlord too. DH & I have high standards and we treat doing up each house like it's our own forever home. New safe electrics, cost effective heating with Combi boiler, new double glazed windows etc.

I couldn't imagine doing anything else!

I personally see it as a very risky bet unless you are very experienced and have a lot of easily accessible funds

It can go wrong so quickly

Also with any profession that relies on other contractors, I think that it would not be as flexible as you imagine it to be

Yes all good points. DH very experienced so will be using his business as a blueprint for my own.

That’s interesting @CaptureCastles! We also intend to treat the properties in this way and do them to a very high standard etc.

Sent too soon. I meant to also say that hopefully those two factors will go at least some way to mitigating risk, but of course there will always be risk, I accept that

Is that what you do full time @CaptureCastles ? As if so then seems like a career to me :)

Yes, although there's no set hours so it doesn't seem 'full time'!

Some months are busy, but then we'll take a couple of months off to travel/do hobbies/enjoy not doing a lot, between projects :)

If your DH already develops property and has his own business, as in he buys, renovates and sells or rents...can't you just sort of join him? :)

It is a legitimate career. You can study it at a post graduate level and become a chartered surveyor specialising in investment.

If you just want to flip residential properties go ahead. And 'high spec' isn't always appropriate as it costs a lot and you don't always recoup your money. So you need to buy well and do up appropriately to maximise the value and minimise costs.

Seems like a bad time to start with the possibility if housing prices crashing/soaring soon

its a great career if you have money - we have a friend who makes millions from this - but, he had a lot of money to start with.

So why the anti property developer sentiment then if it is a legitimate career? Particularly on MN it seems...?

Developers with capital can outbid first time buyers looking for a doer up so some people feel they are helping restrict access to the market. Oh and all residential landlords are money grubbing gits who pay for their properties using other people’s money and reducing property supply.

We are residential landlords and DH is a property developer.

Property is an emotive issue because people do struggle to buy in some parts of the country so have no option but to rent privately.

Are you putting all your eggs in one basket if you both rely on developing for an income. I still work in a profession to keep our income streams diversified.

@ChazsBrilliantAttitude

How do you outbid first time buyers, though? With more stamp duty to pay and profit margins to consider, I'd think ftb can easily outbid a developer.

For example
No mortgage needed so can complete quickly, much lower refurbishment costs, the higher stamp duty doesn’t apply if someone is buying through a company that holds 15 properties.

You either need a lot of capital or find people with money and nowhere to put it so set up a consortium.

Also if you are hanging onto it a mix of commercial and residential is wise.

I think one thing you should consider in your circumstances is you'll be putting all your eggs in the property market. If there is a market crash both you and your husband will suddenly find yourself with no income.

I am aware that some people think this is unethical, but not fully aware of why?

Because often being a 'property developer' seems to mean:

1. buying a small family house
2. extending it as much and as cheaply as possible with no thought to appearance or consequences for neighbours (esp. if permitted development so no opportunity to comment).
3. fill it with as many sharers as possible or sell it to someone else who wants to do so.
4. take your profit whilst leaving the neighbours to deal with the consequences.

Lots of parts of my town seem to be suffering from this. Obviously if you're not doing that then fine.