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Guide to Developing a Property

Developing a property can be an arduous task, with many factors and variables to consider from identifying your future customers to setting a budget. Check out our guide and accompanying videos below on the steps you should be taking when developing a property.

Setting a budget to develop a property

How do you budget for a property development project? There are a few figures that need to be considered:

  • What is the property worth to buy? Consider all the ancillary costs, like legal fees, stamp duty and anything else that goes with purchasing the property.
  • What is the development cost going to be? To get a good idea of what the development costs are going to be you’ll need advice from either a builder or surveyor.
  • What will the property be worth when you come to sell or rent it? What sort of margin can you pull from it? That will tell you what the profit is that you can reconsider the property.
  • The cost of working slowly on the project. Many people who develop properties tend to do the work themselves, but the cost of that is the project can run slower than you anticipated. Not only is your time money, but you are paying the mortgage, any associated loans, and all before you have seen any income from the property at all.

For a rough estimate of your overall costs, you can try using an online home renovations calculator - but remember this is an estimate, and the total cost could be considerably more or less.

We can sometimes get wrapped up in the project ourselves and start to impose our own personal feelings on the property. Buying fittings that perhaps we would like, but we need to remember is that our tastes may not be the customer's too. And if you’re buying fancy light fittings or fancy taps, kitchen fittings or appliances that you might like you may very well be spending money that is unnecessary because whoever buys the property is going to come in and put their own stamp on the property anyway.

Lastly, you need to be aware of accounting for the value of property increasing. The property value could increase or even decrease over time. And while you’re developing your property prices may very well go up, they might slow, or they may very well go down. The last thing you need to do is be stuck with a figure in your mind of what you’re going to realise from the property that isn’t realised. So just account for the value you add to the property. And this of course is more important for you’re using the profits from your development to purchase other properties because you may end up having to buy higher, as well as selling higher.

Finding the right tradespeople for your property development

When purchasing the property, you may have had a relationship with a surveyor who helped oversee the sale. And now that same contact may be able to help you manage the development. You may already have some experience in the field with people to call on for labour already.

An easy way to build a team that you can work with - after you identify the type of work you need - is to put the work out to tender. Once you do that, you’re going to have tradesmen visiting to see what the job is. By meeting them beforehand, you’ll be able to recruit the people best suited to the work.

In any project, delays are inevitable, but if you have the right people on your side, then you will encounter fewer problems. So it is worth putting the time in and investing some effort in building the team that you need. 

You will also need a project manager for your development - quite often your main contractor will be more than happy to take on the role of project managing. So whether the biggest amount of work you have to do is a building project, or an electrical project, or a plumbing project, the person who is handling that aspect of the work for you, will quite often be happy because then they can work around the other tradesmen coming and going throughout your project.

This will save you the cost of an actual project manager, and will ensure that work gets done on time, and is going to come in on budget.

So once all the work is complete then you need to add the next member of your team. Having the right letting agent or estate agent on side is vitally important. The wrong tenants will cost you money in wasted rent or damage to the property, so having the right agent on board ensures that they carry out references and a proper inventory. They will also make sure that the property is maintained, or carry out regular checks on it. They will act as a liaison between tradesmen when a gas safety check is needed or when vital repairs need to be done. Therefore, it is worth your time investing some effort in finding the right letting agent or estate agent for your property.

How to develop a property for the location

If you’ve located a property that has potential to be developed, there are a number of things you will need to consider. Who is your customer? Who are you developing this property for? Remember the environment you are in and that most customers will have different requirements.

Consider a residential street in Norwich, with a property half-way between the high street and the university, with a number of student accommodation properties, terrace houses and HMOs up the street. Down the street there are a number of semi-detached houses suitable for families.

This hypothetical property, ideal for development, boasts a large attic, a huge through lounge inside and a garden at the rear. If development of this property was to happen, there would have to be a clear type of person identified to live in it before a screwdriver is picked up or a drop of cement is mixed.

Could you change the attic into another room to fit another student? Could you split the lounge into two separate rooms for a common room for the students and a bedroom to get more yield from the property? Or, in terms of a family would you open out the lounge and perhaps create a playroom for children and storage space in the loft? Would you need the garden to be low maintenance in a student accommodation? Or do you want it to have nice green foliage and a nice lawn for a family to occupy?

Before you even purchase, consider who it is you’re developing the property for, as it will affect a lot of decisions in terms of spending your budget.

Security for an unoccupied property

If you are involved in renting, selling or developing properties, there are going to be times when the property is left vacant. During those times you need to make sure that your asset is protected as it can be.


Unoccupied properties are like magnets, attracting all kinds of headache – like having to replace stolen copper. However, these burglars are not interested in occupied properties and the easily accessible items there.

So when your property is empty, here are a few things you can do to deter break-ins to your unoccupied property. 

1) Use blinds, drapes and curtains to cover up your windows to prevent people from realizing it is unoccupied.

2) Put some standing lights on timers so they illuminate at different times – upstairs and downstairs and in the hallways. This lends to the impression that your property is occupied.

3) Do not over-invest in locks and expensive security measures – some of the simpler things are able to help too.

4) Do not forget about garage doors and access through the garage to the house. Once someone is inside the garage, they have complete access to the house, and they can take time breaking into the property because nobody can see them.

5) If the property is unoccupied because you have work being carried out, don’t allow the tradesmen to leave their tools behind in the evening. It is more attractive for intruders or burglars to break into your property and cause damage to get to the builder’s tools.

Home insurance advice for renovations and unoccupied properties

For the average property - a three bedroom terrace, or two bedroom semi-detached, with a garden, brick built and slate roof - it’s easy to go on an aggregator site and get a simple insurance quote. However, as soon as you leave the property unoccupied, decide to develop it or rent it, or take a lodger, then you need to look at some specific home insurance.

If you’re carrying out some renovations, you will have tradesmen going in and out of the property and they will, or should, have their own tradesmen insurance. However, you will also need to have some specific insurance for your renovations, in the unlikely event that you put your foot through the floor, damage some pipework or suffer any other incident.

If you’ve renovated the property and you’re ready to let it out, but you’re not living in the property yourself, remember not all tenants are as conscientious as you’d want them to be. That’s why insurance companies prefer you to have specific types of landlord insurance: to make sure you covered against any eventuality. The same can be true if you are living in the property and you take in lodgers: you’ll need to have specific insurance such as a buy-to-let insurance policy or a landlord’s policy.

If the property is unoccupied, it is at much higher risk of crime, not to mention all of the things that can go wrong when there’s nobody around to deal with them. For example, a frozen pipe, burst water main, or anything which can’t be resolved immediately because there’s nobody there to see it. For that reason, you need to make sure your policy covers you for that. Most insurers will expect you to notify them after the property has been empty for more than about 30 days, but a good specialist insurance company will be able to add on unoccupied insurance or remove various requirements for you as and when needed.

Unoccupied property insurance from Towergate

For more information on the cover Towergate can provide for your unoccupied property, visit our unoccupied home insurance webpage or call one of our specialist advisers on 0344 892 1750.

This is a marketing article by Towergate Insurance.

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