Property development requires a particular set of skills. No, not the Liam Neeson type. The skills you need are used by many people in various industries, day in, day out. They are the skills of a CEO.
I’ve lost count of the number of students I teach whose initial ambition was to become their own Project Manager. This is not the way to go. Instead, you want to be the CEO who hires a Project Manager to manage your projects for you. The PM will then be your eyes and ears on the project, reporting back to you.
At a high level, your job breaks down into several key roles:
- Establishing your business, strategy, and brand, and decide what type of development you’re going to tackle.
- Recruiting your team of professionals, including architects, solicitors, project managers, structural engineers, etc.
- Finding a supply of good quality, profitable deals. These will need to be analysed to sort the wheat from the chaff and decide which ones are worth pursuing.
- Arranging the finance for your first project, working with both commercial lenders and private investors.
I’ve been training and working with developers for nearly 40 years, and here are the essential skills that you need to do the job well.
1. Organisational skills
Your property development business won’t happen unless you are highly organised. You also need to be systemised and make sure you establish processes for each part of your business. They take effort and foresight to set up, but they pay big dividends and stop your business from degenerating into a shambles.
2. People skills
Development is fundamentally a people business. Not only will you be working with a team of professionals, but you’ll also be wooing estate agents, lenders, and private investors. This requires the ability to create and build rapport. Development projects always have a few bumps in the road, so you’ll need the ability to get to the end with all of your critical relationships intact, ready to go again.
3. Management Skills
Property development is a business, and you need to operate it as such, deploying management skills and being highly disciplined. You’ll also need to stay on top of cash flow, as even profitable deals could fall into the red on their journey unless you manage things effectively.
4. Decision-making skills
Any decision is often better than no decision, and in development, you’ll have a team of professionals to advise you. The problem can arise where the developer needs to make a difficult call, and they dither, hoping some silver bullet solution might suddenly arrive. This dallying has scuppered many a project, frustrating the contractor who can’t progress until a decision is made. When the ball is in your court, make a decision quickly and move on. In development, time is usually money.
5. Hard work
Once you’re up and running, development can be a job you do in your spare time. But you’ll need to put in some hard graft to get started and also be persistent. Great deals don’t grow on trees, and there’s no guarantee you’ll find one quickly. The good news is that this frightens off most of the competition, so if you know what you’re doing and you stick with it, you’re likely to be successful.
6. Determination
It’s easy to get disheartened. Great deals can be difficult to find, and projects rarely go entirely as planned. The spoils go to the developer who keeps going. But your first project will inevitably be your most challenging, and the journey gets easier as you build your experience and reputation.
7. Education
Your property development education is the glue that holds all of the above together. Can you avoid making any expensive mistakes without getting training? It’s theoretically possible, but then it’s also possible to jump out of a plane without training. The other thing that education gives you is the ability to see opportunities that other developers can’t see. And you’ll want that edge so you can get the best possible deals.
Property development has to be one of the world’s more highly leveraged jobs, but this only applies if you approach it correctly. Do not slip into taking on the Project Manager role. Stick to your role as CEO.
By Ritchie Clapson CEng MIStructE, propertyCEO
ABOUT THE AUTHOR
Ritchie Clapson CEng MIStructE is a veteran property developer of almost 40 years and co-founder of propertyCEO, a nationwide property development and training company that helps people create a successful property development business in their spare time.
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