When thinking of entering the property development industry, it is important to understand all the options available to you. At first it can seem a daunting venture to undertake, but there are plenty of ways that you can make your foray into property development much easier. One of these is utilising a specialist property development finance company. Here is a guide to help you make the most of the opportunities available to you.
What is property development finance?
Property development finance is essentially a short-to-medium term loan designed to facilitate the property development industry. As with other types of loan there are multiple applications, such as financing the development of residential and commercial properties, financing the purchase of free development land, or financing renovation or refurbishment work.
What security do I need?
Most property development finance companies will accept property or land as security for the loan being provided. Types of allowed property security include residential plots or properties, mixed-use plots, and land that has already been granted planning permission. It is worth noting that some lenders will be unwilling to accept land as security if it has not acquired planning permission. However, it is always worth discussing your situation with a potential lender, as good property development lenders will always be willing to try and accommodate your needs.
Moreover, property development finance loans help to facilitate construction projects by securing the loan against the projected gross value of the finished property, as opposed to traditional loans, which use the market value of the land or property as security.
What Experience Do I Need?
As with any other loan, lending companies want to know that you have the ability to fulfil the terms of the loan. Any level of experience in property development is always beneficial, and unfortunately you may encounter some problems with certain lenders if it is your first foray into the property development industry.
Most lenders will expect you to have some level of experience with the type of work you are planning to undertake. Furthermore, acquiring the relevant planning permission will almost certainly be essential, and nature of the work, for example whether you are converting an existing property, or developing a piece of fresh land, will be taken into consideration.
However, if you do not have the relevant experience, do not be dissuaded. There are plenty of specialist property development companies that can accommodate those lacking in expertise, and help to construct a professional team to help complete the project. To learn more about how property development finance can help you to achieve your goals, contact us today!