How to Become A Property Developer South Africa

Property Developer is a business process, encompassing activities that range from the renovation and re-lease of existing buildings to the purchase of raw land and the sale of developed land or parcels to others.

What is the role of a property developer?

Typically, developers purchase a tract of land, determine the marketing of the property, develop the building program and design, obtain the necessary public approval and financing, build the structures, and rent out, manage, and ultimately sell it. Sometimes property developers will only undertake part of the process.

What constitutes a property developer?

Real estate developers are the people and companies who coordinate all of these activities, converting ideas from paper to real property. Developers buy land, finance real estate deals, build or have builders build projects, create, imagine, control, and orchestrate the process of development from the beginning to end.

Can anyone be a property developer?

One of the most appealing things about property development is that anyone can do it. You do not need any qualifications or training to get started. Anyone can become a property developer simply by buying a house then selling it on for a profit.

A Property Developer: Career Information

Degree LevelBachelor’s degree is standard; some employers prefer MBA
Degree FieldsCivil engineering, business, and management
CertificationCertification available but not required
Experience5+ years of experience
Key SkillsExcellent communication, leadership, problem solving, interpersonal, analytical, presentation, and project management skills; proficiency in Microsoft Office; the ability to read and understand blueprints; knowledge of construction and architectural design
Salary (2020)*R 1389476.47 (median annual salary)
Projected Growth*A Property Developer jobs are expected to remain stable in the coming years

Below is How to Become A Property Developer South Africa

Find out more about what you need to know about becoming a property developer in South Africa.

1. Getting started as a property developer

To get started as a property developer, you will need to build your team of trusted team players in the development field, to help make your goals a reality. This team should consists of:

Architect: Likely the most important team member, start working with architects early on. The architect will also manage other technical professionals.

Estate agent: A key role player, not only in the sale of the project, but you will also rely on their insights to conclude the initial feasibility.

Quantity surveyor: Plays a role during the due diligence and during the project to track and control the expenses and resources. A good QS is key to any project.

 2.Three different strategies for developers

 Learn about the main 3 strategies that developers can adopt, which includes:

Developing to sell: A good place to start in order to build capital and experience.

Developing to hold: Where you would develop, with the sole intent to hold all the units at the end of the project and generate a rental cash flow.

Hybrid exit strategy: Where you as the developer would sell enough units to recoup all the development costs. Then the remaining units would be kept, at near zero cost, and you could generate a cash flow from letting them.

3.Seven development project steps

 The “blueprint” to almost every development is the 7 development project steps, which include:

Deal evaluation: Examining what potential a deal has, to be financially feasible.

Commercial agreement: Laying out a purchase process as well as a due diligence period.

Due diligence: You will aim to reduce your risk and conclude any suspensive conditions laid out in the commercial agreement.

Planning approval: Your architect will work closely with a town planner to have the plans for the project approved by the city.

Marketing and pre-sales: Sell as much of the project off-plan as possible.

Financing: Once the project has sufficient pre-sales, a development partner or bank would be willing to loan the capital required to pay for construction.

Proceed with development: Only at this stage are builders and bricks going on site. This is by far the least critical point.

How do I become a property developer in South Africa?

How to become a Property Developer/Investor in South Africa

Buy Property and rent them out immediately (Buy-To-Let)

Choose flats over houses.

Develop properties from scratch.

Think twice about selling properties you just bought.

Useful Links.

How much does a property developer make in South Africa?

However, after 10 years in the industry, you might want to relocate to Johannesburg: developers with 10-15 years of experience based in Gauteng reported earning an average salary of R68,000 per month, while those in Cape Town at the same level earn about 5% less at R64,735 on average.

How do I become a property developer?

How to become a property developer

Choose your route. First things first.

Create a business plan. Once you’re on the right path, it’s time to think about your business plan.

Get funding.

Know your market.

Buy at the right price.

Add value.

Can anyone become a property developer?

One of the most appealing things about property development is that anyone can do it. You do not need any qualifications or training to get started. Anyone can become a property developer simply by buying a house then selling it on for a profit.

Is property development a good career?

Property development is not a career for a school-leaver or recent graduate. “You can make a career out of it and it can be extremely rewarding. Just make sure you are organized and prepared to work hard,” says Fletcher.

How much does it cost to start property development in South Africa ?

How much you will need to do a property development is going to come down to the project type and the project size. As a general rule, you want to have somewhere between 25-35% of the proposed overall development cost. It will come down to your lender’s appetite for the type of project you are looking to do.

Do developers make a lot of money?

According to the National Association of Home Builders (NAHB), developers average about R 42.85 million in gross profit on R 231.81 million in revenue. That’s an 18.9% percent profit.