Getting started in the property business takes quite a bit of planning. I found my development niche through market research, which I'd recommend to anyone getting started in the property business.
But how exactly do you go about picking a niche that'll work best for you? Well, here are my top tips.
1. Understand your local market
While you might have plans to go geographically more comprehensive once established, I recommend basing your niche on what's available locally when you are starting. For example, if you live in an urban area, there might be greater demand for single-occupancy flats than houses. If so, the best niche would be converting larger spaces into multiple apartments.
Working in your local area will assist you in making a successful start in several ways. It will be faster because you are not required to spend too much time travelling. Local property networking groups will be able to advise you on your preferred niche providing general advice and industry contacts such as builders, agents and finance brokers.
Each of these may specialise in the sector you are contemplating and could be vital to your early success. You may even find someone already operating in your prospective niche, and they could become a mentor. When starting, research such as this is important, as is taking action. Many 'would be' property investors and developers spend so much time 'researching' that they never actually implement anything. The balance between research and action can be hard to find, but this is an area where having a mentor can be helpful.
2. How much work do you want to put in?
This is an important question to ask very early on in the research process. I like to be quite involved in the development process, but I know this isn't the case for everyone. If you're looking for a more passive income, developing a portfolio of rental properties might be the way forwards. However, if you want to be a bit more hands-on, perhaps flipping cheap properties for resale is the best niche for you.
3. Consider sticking to one style of property
In the early stages of developing your niche, it's worth sticking to one type of property. However, this can be as broad or as specific as you want. For example, you could stick to converting townhouses, or settle on buying and developing apartments. Focusing on one type of property in the early stages will allow you to understand the property industry's nuances.
Remaining focused and building your experience in one strategy will result in you carrying previous learning on to your next project. My business has focused ruthlessly on a particular activity, the conversion of offices to residential apartments. I put much of its success down to this ruthless focus and our continual building of knowledge in just this one area.
4. What are your long-term goals?
Although your goals can change over time, I recommend having a basic idea of where you see yourself moving in the property industry. By this, I mean, whether you want this to be a side income or your full-time job. Some people are quite successful, topping up their primary income flipping cheap properties by merely making cosmetic changes. In contrast, others find full-time work developing and operating significant portfolios or building development businesses.
Then, of course, you have the investment side of things. Investing can be a better niche if you don't want to sink a lot of time into property, offering a more passive income. Whichever you choose, consider how this will impact your current job and other areas of your life. It would be best if you also think about your attitude to risk. The risks one developer might take may cause too much stress to another.
Finding your niche in the property industry isn't an easy decision. It's better to put in the hard work during the early stages of your property journey for a better chance of success. That said, you can never undervalue a bit of strategic trial and error! If you'd like any other information about finding your niche or have any questions, please feel free to reach out to me.
Glenn Delve is one of the UK's leading authorities for commercial-to-residential property conversions. In 2014, Glenn founded Ocea which led to the purchase, design, planning, conversion, and selling of over 20 developments, scaling from initial project sizes of 4-12 units to current schemes of 70-95 units.