property development business plan south africa pdf

A Sample Property Development Business Plan Template

By: Author Tony Martins Ajaero

When you talk about property development business, loads of entrepreneurs will back off because they know that it is a business that involves huge startup capital. Beyond every reasonable doubt, one of the most profitable, creative and interesting aspects of the real estate industry in south africa is property development.

As a matter of fact, developers are major players when it comes to determining the prices of properties. Although this type of business venture can be risky, but in other to make it big in the industry as a property developer, you just have to take calculated risks.

Some factors that are major concerns in the property development business are cost increase as a result of inflation, currency devaluation and economic challenges. Unforeseen delays on the part of government agencies, litigation and also delays from contractors can lead to substantial cost increase especially if the project is heavily dependent on bank loans.

Suggested for You

• A Sample Student Accommodation Business Plan Template
• How to Write a Car Wash Business Plan [Sample Template]
• How to Write a Taxi Business Plan [Sample Template]
• How to Write a Butchery Business Plan [Sample Template]
• How to Write a Cleaning Business Plan [Sample Template]

If perhaps during this period there is a change in the supply and demand dynamics of the property sector, the project can be affected negatively. Below is a sample property development company business plan template that will help you successfully write yours with little or no stress.

How to Write a Property Development Business Plan for South Africa

1. industry overview.

Property development industry is a many-sided business that covers all activities ranging from acquiring raw land to selling or renting or leasing of fully finished and furnished properties. Developers are responsible for turning ideas into real properties; i.e. they acquire land, they finance real estate deals, they engage in building projects and they sell, rent, lease and manage properties on behalf of their clients.

In 2016, the investment volume in South Africa’s real estate saw a 55.2 percent increase, in spite of economic challenges, weak currency and political uncertainty. The South African listed property industry has risen nearly 9 percent in the first nine months of the year, about double in equities achieved which was 4.82 percent. At 7%, South Africa’s real estate market continues to demonstrate maturity and ongoing resilience.

The South African property sector is valued at R5.8 trillion, according to the latest Property Sector Charter Council’s (PSCC) report. New research shows 75 percent of global real estate investment takes place in highly transparent markets with South Africa ranking 25th out of 109 markets.

Property Divisions in the Pretoria region enjoyed a 49 percent increase in turnover and a 42 percent increase in unit sales. Foreign buyers only make up around 5 percent of new homeowners in South Africa.

Just like all other investment vehicles, there are potential down sides that you need to look out for as a property developer. One of the major risks in property development is a sudden down turn in the economy. Property development could take a period of two to three years from conception to completion depending on the size of the project and the cash flow.

As a matter of fact, some projects can even take much longer than that. Because of the time involved in developing properties from start to finish, loads of unanticipated things could crop up.

The property development cum real estate industry is highly regulated in South Africa and anyone who aspires to start a property development company must apply and obtain a license before they can legally operate in the industry.

Lastly, as a property developer, it is very important to be creative, to be able to use your ideas to meet the rapidly changing needs of the society when it comes to properties.

2. Executive Summary

Lucas Polokwane® Property Development Company is a South African based property development company. Our head office will be located in a centrally located office facility in the heart of Cape Town – Western Cape Province. We chose Western Cape because reports show that the Western Cape will continue to outperform all other areas of the country, remaining the top performing major metro housing market in SA. House price inflation in the region has risen by over 10.35 percent, with no indication of it slowing down.

Although our Head Office will be located in Cape Town, but we will open our branch offices in major cities in South Africa within our first five years of operation. Lucas Polokwane® Property Development Company will engage in property development projects for a wide range of clients. We will work towards becoming one of the largest property development companies in South Africa.

We are quite aware that property development requires huge a capital base, which is why we have perfect plans for steady flow of cash from private investors who are interested in working with us. We can confidently say that we have a robust financial standing and we are ready to take on any opportunity that comes our way in the real estate industry.

As part of our plans to make our customers our number one priority and to become one of the leading property development companies in South Africa, we have perfected plans to adopt international best practices. Lucas Polokwane® Property Development Company has perfected plans that will help us to become a specialist in turning slums into beautiful cities and turning dilapidated buildings into master pieces, and that hopefully will be our brand and signature.

Lucas Polokwane® Property Development Company will at all times demonstrate her commitment to sustainability, both individually and as a firm, by actively participating in our communities and integrating sustainable business practices wherever possible. We will ensure that we hold ourselves accountable to the highest standards by meeting our client’s needs precisely and completely.

Lucas Polokwane® Property Development Company is owned by Lucas Polokwane and his immediate family members. Lucas Polokwane has a Degree in Building Engineering from the University of Cape Town and he has successfully acquired over a decade of experience prior to starting his own company.

Other investors with the same investment ideology whose names cannot be mentioned here for obvious reasons are going to be part of the business especially as it relates to pooling cash together for property acquisition, renovation and beautification.

3. Our Products and Services

Lucas Polokwane® Property Development Company is going to offer varieties of services within the scope of the property development industry in South Africa. Our intention of starting our property development company is to favorably compete with leading players in the real estate industry both in Western Cape and in the whole of South Africa.

Our business offerings are listed below;

• Residential additions, alterations and renovations
• Construction management for residential remodeling
• Fire and flood restoration
• Home improvement
• Porch construction
• Sunroom additions
• Kitchen and bathroom upgrades
• Disaster repairs
• Manage Properties and Facility for Clients
• Property Makeover Services
• Real estate consultancy and advisory services

4. Our Mission and Vision Statement

• Our vision is to become one of the top 10 property development companies in South Africa within the first 10 years of starting Lucas Polokwane® Property Development Company.
• Our mission is to help people, businesses, property owners and clients in Cape Town – Western Cape and throughout South Africa develop and remodel their homes, offices and properties to fit into the ideal mental picture they have.

Our Business Structure

Our company’s structure is not entirely different from what is obtainable in the real estate industry. As a matter of fact, we have created a structure that will allow for easy growth for all our employees and also, we have created platforms that will enable us attract some of the best hands in the industry.

We are quite aware that the success of any business lies in the foundation on which the business is built on, this is why we have decided to build our property development company on the right business foundation. We will ensure that we only hire people that are qualified, honest, hardworking, customer centric and are ready to work to help us build a prosperous business that will benefit all our stakeholders.

As a matter of fact, profit-sharing arrangement will be made available to all our senior management staff and it will be based on their performance for a period of five years or more depending how fast we meet our set target.

Lucas Polokwane® Property Development Company is fully aware of the modus operandi in the property development line of business, hence adequate provision and competitive packages have been prepared for independent sales agents. Our marketing department will be responsible for managing this aspect of our business structure.

Below is the business structure we will build Lucas Polokwane® Property Development Company on;

• Chief Executive Officer

Project Manager

• Company’s Lawyer/Secretary

Admin and HR Manager

• Head of Construction and Renovation
• Business Developer/Sales and Marketing
• Customer Service Executive/Front Desk Officer

5. Job Roles and Responsibilities

Chief Executive Officer – CEO (President):

• Increases management’s effectiveness by recruiting, selecting, orienting, training, coaching, counseling, and disciplining managers; communicating values, strategies, and objectives; assigning accountabilities; planning, monitoring, and appraising job results; developing incentives; developing a climate for offering information and opinions.
• Creates, communicates and implements the organization’s vision, mission, and overall direction – i.e. leading the development and implementation of the overall organization’s strategy.
• Responsible for fixing prices and signing business deals
• Responsible for providing direction for the business
• Responsible for signing checks and documents on behalf of the company
• Evaluates the success of the organization
• Responsible for planning, management and coordinating all projects on behalf of the company
• Supervises renovation projects
• Ensures compliance during project execution
• Provides advice on the management of projects
• Responsible for carrying out risk assessment
• Uses IT systems and software to keep track of people and progress of ongoing projects
• Ensures that project desired result is achieved, the most efficient resources are utilized and different interests involved are satisfied.

Company’s Lawyer/Secretary 

• Responsible for drawing up contracts and other legal documents for the company
• Consults and handles all corporate legal processes
• Develops company policy and position on legal issues
• Researches, anticipates and guards company against legal risks
• Represents company in legal proceedings (administrative boards, court trials et al)
• Plays a part in business deals negotiation and take minutes of meetings
• Responsible for analyzing legal documents on behalf of the company
• Prepares annual report for the company
• Responsible for overseeing the smooth running of HR and administrative tasks for the organization
• Designs job descriptions with KPI to drive performance management for clients
• Regularly hold meetings with key stakeholders to review the effectiveness of HR Policies, Procedures and Processes
• Maintains office supplies by checking stocks; placing and expediting orders; evaluating new products.
• Defines job positions for recruitment and managing interviewing process
• Carries out induction for new team members
• Responsible for training, evaluation and assessment of employees
• Responsible for arranging travel, meetings and appointments
• Oversees the smooth running of the daily office activities

Construction Engineers

• Responsible for handling property development services
• Establishes and enforces company’s engineering and construction standards
• Ensures that renovation / construction work meets or exceeds standards within a designated geographic area.
• Provides overall direction on assigned construction projects; reviews and makes recommendations on planning and design of projects; negotiates contracts or participates in contract negotiations; monitors day‐to‐day progress and activities on project construction sites.

Marketing and Sales Executive/Business Developer

• Identifies, prioritizes, and reaches out to new partners, and business opportunities et al
• Identifies development opportunities; follows up on development leads and contacts; participates in the structuring and financing of projects; assures the completion of development projects.
• Responsible for supervising implementation, advocate for the customer’s need s, and communicate with clients
• Finds and qualifies land for development based on company’s land requirements; maintains a land search database; initiates discussions with property owners about the possible sale of property
• Develops, executes and evaluates new plans for expanding sales
• Documents all customer contact and information
• Represents the company in strategic meetings
• Helps to increase sales and growth for the company
• Responsible for preparing financial reports, budgets, and financial statements for the organization
• Provides managers with financial analyses, accounting reports; analyzes financial feasibility for the most complex proposed projects; conducts market research to forecast trends and business conditions.
• Responsible for financial forecasting and risks analysis.
• Performs cash management, general ledger accounting, and financial reporting for one or more properties.
• Responsible for developing and managing financial systems and policies
• Responsible for administering payrolls
• Ensures compliance with taxation legislation
• Handles all financial transactions for the company
• Serves as internal auditor for the company

Front Desk/Customer’s Service Officer

• Receives visitors/clients on behalf of the organization
• Receives parcels/documents for the company
• Handles enquiries via e-mail and phone calls for the organization
• Distributes mails in the organization
• Ensures that all contacts with clients (e-mail, walk-In center, SMS or phone) provides the client with a personalized customer service experience of the highest level
• Through interaction with clients on the phone, uses every opportunity to build client’s interest in the company’s products and services
• Manages administrative duties assigned by the line manager in an effective and timely manner
• Consistently stays abreast of any new information on the company’s properties that are put up for sale, promotional campaigns etc. to ensure accurate information is supplied to clients when they make enquiries

6. SWOT Analysis

The fact that property development is a very rewarding business in South Africa does not mean that there are no challenges in the industry. Starting a property development business in South Africa comes with its own fair share of challenges as you would have to abide by the law and also compete with entrepreneurs in the real estate business value chain.

In order to compete favorably in the property development industry, we have been able to hire the services of HR consultants to help us conduct critical SWOT analysis for us. Here is a summary of the result of the SWOT analysis that was conducted on behalf of Lucas Polokwane® Property Development Company.

Some of the strengths that we will be bringing to the table in the industry is our robust relations with property owners and properties investment moguls in the whole of South Africa; our access to funding and our team of experts who have cut their teeth in the property development line of business; our commission structure and relationship with freelance real estate agents in Cape Town – Western Cape and other province in South Africa will also count towards our advantage.

As a newbie in the property development line of business, we may have challenges competing with big time property developers in South Africa; that perhaps is part of our weakness.

• Opportunities:

The opportunities in the property development industry especially in Cape Town – Western Cape is massive considering the fact that reports show that the Western Cape will continue to outperform all other areas of the country, remaining the top performing major metro housing market in S.A. We are ready to take advantage of any opportunity that comes our way.

Some of the threats that we are likely going to face as a property development company operating in South Africa are unfavorable government policies , and global economic downturn; global economic downturn usually affects spending power and the real estate industry is known to encounter decline in sales and profits during this period. There is hardly anything we could do as regards these threats other than to be optimistic that things will continue to work for our good.

7. MARKET ANALYSIS

• Market Trends

A notable trend in the property development industry in South Africa shows that the biggest group of home buyers are millennials; in fact, buyers who are 36 years old and younger continue to purchase homes at a higher rate than other age groups.

The market trend in the property development sector is that there are no fixed profit projections when engaging in a property development deal.

The profit you stand to gain depends on loads of factors amongst which are your attention to details, ability to turn a slum into an edifice and knowing exactly when to seal a property development deal. If you are able to get all the above stated factors right as a property development company, your gains will always be far more than your loss.

Another obvious trend that is common with property development companies in South Africa is that there is also an increased demand for luxury cluster homes in areas like Hyde Park, Atholl, and Morningside. In Gauteng, luxury homes that move away from the noise and congestion of traffic have become popular. High-end buyers are also opting for homes that are still opulent, yet offer more security and convenience.

This explains some of their big sales including the sale of a R33 million French style house in Constantia Upper Cape Town, and a R35 million property in Zimbali.

One thing is certain for every property development company; if they are hardworking, creative and proactive, they will always generate enough income to meet all their overhead and operational cost, keep their business going without struggle and make reasonable profits from all business deals that they are involved in.

8. Our Target Market

As a property development company, our target market cuts across property owners of different class and people from all walks of life. We are coming into the property development industry with a business concept that will enable us work with people of different financial capabilities.

As a matter of fact, our target market is the whole of South Africa and we have put plans in place to recruit freelance agents to represent our business interest wherever they are located in South Africa. Below is a list of the people and organizations that we have specifically designed our services for;

• Families who are interested in acquiring a decent and well renovated home
• Corporate organizations who are interested in acquiring their own property
• Home owners who are interested in developing/remodeling and selling off their homes
• Properties owners who are interested in remodeling and selling off their properties
• Foreign investors who are interested in owning properties in South Africa and remodeling the property
• The government of South Africa (Government contracts)
• Managers of public facilities who would want to engage property development companies to help them develop/remodel properties under their care

Our competitive advantage

The property development industry is a highly competitive industry. Clients will only hire your services if they know that you can help them remodel their homes to fit into the picture of the ideal home they have in mind.

We are quite aware that to be highly competitive in the property development industry means that you should be able to deliver consistent quality property development jobs and you should be able to meet the expectations of your clients at all times.

Lucas Polokwane® Property Development Company might be a new property development company, but the owner of the business is a guru in the industry and has what it takes to grow a business from scratch to become a top brand within the shortest time possible.

Aside from our robust experience and expertise of our team, we have a very strong online presence that will enable us attract clients from all across South Africa.

Lastly, our employees will be well taken care of, and their welfare package will be among the best within our category in the industry. It will enable them to be more than willing to build the business with us and help deliver our set goals and achieve all our business objectives. We will also engage freelance marketing agents on a commission level to help us market our services.

9. SALES AND MARKETING STRATEGY

• Sources of Income

Lucas Polokwane® Property Development Company is established with the aim of maximizing profits in the property development industry. Although we are a property development company, but part of our work force are also licensed real estate agents hence we intend generating additional income from diverse means in the real estate agency.

We have successfully built a vibrant real estate network that covers the whole of South Africa so as to help us build a profitable business. Below are the sources we intend exploring to generate income for Lucas Polokwane® Property Development Company;

10. Sales Forecast

It is a known fact that as long as there are property owners in South Africa, there will always be need to for them to remodel their properties from time to time to conform with the trends in the neighborhood or city.

We are well positioned to take on the challenges that are synonymous to property development businesses in South Africa, and we are quite optimistic that we will meet out set target of generating enough profits from the first months of operation and grow the business beyond Cape Town to other Provinces in South Africa within record time.

We have been able to critically examine the property development line of business, we have analyzed our chances in the industry and we have been able to come up with the following sales forecast. The sales projections are based on information gathered on the field and some assumptions peculiar to similar startups in South Africa.

• First Fiscal Year: R500,000
• Second Fiscal Year: R1.2 million
• Third Fiscal Year: R1.7 million

N.B : This projection was done based on what is obtainable in the industry and with the assumption that there won’t be any major economic meltdown and any major competitor offering the same services we do within the locations where we have a strong business presence. Please note that the above projection might be lower and at the same time it might be higher since some factors are beyond our control.

• Marketing Strategy and Sales Strategy

We are mindful of the fact that there are competitions in the property development market in South Africa, hence we have been able to hire some of the best business developers to handle our sales and marketing.

Our sales and marketing team will be recruited based on their vast experience in the industry and they will be trained on a regular basis so as to be equipped to meet their targets and the overall goal of the organization. The training is not restricted to only our full – time employees but would also extend to our freelance brokers.

Our goal is to become one of the leading property development companies in South Africa which is why we have mapped out strategies that will help us take advantage of the available market and grow to become a major force in the industry.

Lucas Polokwane® Property Development Company is set to make use of the following marketing and sales strategies;

• Introduce our business by sending introductory letters alongside our brochure to stake holders in the real estate industry
• Promptness in bidding for properties that are put up for remodeling and development
• Advertise our business in real estate/properties magazines and websites
• List our business on yellow pages (local directories)
• Attend real estate related expos, seminars, and business fairs et al
• Create different packages for different category of clients in order to successfully remodel or develop their homes/properties
• Leverage on the internet (social media platforms) and our official website to promote our business
• Encourage word of mouth marketing especially when we have a home for sale

11. Publicity and Advertising Strategy

We have been able to work with our consultants to help us map out publicity and advertising strategies that will help us walk our way into the heart of our target market. We are set to take the property development industry by storm which is why we have made provisions for effective publicity and advertisement of our company.

Below are the platforms we intend to leverage on to promote and advertise our property development business;

• Place adverts on both print and electronic media platforms
• Place our flexi banners with our company’s logo and contacts in every property we put up for sale
• Sponsor relevant TV shows so as to be able to communicate our brand and what we do
• Maximize our company’s website to promote our business
• Leverage on the internet and social media platforms like Instagram, Facebook, Twitter, LinkedIn, Google+ and other platforms (real estate online forums) to promote our business and list our properties for sale and for lease.
• Install our billboards in strategic locations all across Western Cape Province
• Distribute our fliers and handbills in targeted areas from time to time
• Attend landlord and residents association meetings with the aim of networking and introducing our business.
• Ensure that all our workers wear our branded shirts and all our vehicles are branded with our company’s logo

12. Our Pricing Strategy

Part of our business strategy is to ensure that we work within the budget of our potential clients to help them develop or remodel their properties to meet their expectations. It is the practice in most parts of the world for properties to be valued by professionals based on the area the facility is located, the type of facility and other factors.

Since we are not directly in control of the pricing system in the real estate industry, we can only abide by what is obtainable when it comes to fixing a price for a property development contract. But one thing is certain, we will ensure that we deliver excellent jobs when have we are contracted to do so.

Lastly, we will ensure that we keep our fees below the average market rate for all of our clients by keeping our overhead low and by collecting payment in advance. In addition, we will also offer special discounted rates to our clients from time to time especially when they recommend clients to us.

• Payment Options

At Lucas Polokwane® Property Development Company, our payment policy is all inclusive because we are quite aware that different people prefer different payment options as it suits them but at the same time, we will not accept payment by cash because of the volume of cash that will be involved in most of our transactions. Real estate deals usually involve huge amounts of money.

Here are the payment options that Lucas Polokwane® Property Development Company will make available to her clients;

• Payment by via bank transfer
• Payment via online bank transfer
• Payment via check
• Payment via bank draft

In view of the above, we have chosen banking platforms that will help us achieve our aims without any hitches and we will also pay our freelance agents (real estate brokers) with same platforms. Our bank account numbers will be made available on our website and promotional materials to clients who may want to deposit cash or make online transfer for our services.

Any agent who intend paying with cash will be directed to deposit the money into our corporate account and then present their payment tellers to us.

13. Startup Expenditure (Budget)

From our market survey and feasibility studies , we have been able to come up with a detailed budget on achieving our aim of establishing a standard and highly competitive property development company in Cape Town – South Africa and here are the key areas where we will spend our startup capital;

• The total fee for incorporating the business in South Africa – Name reservation application costs R50 and company registration R125
• The budget for permits and license – R2,000
• The cost for hiring business consultant – R2,500.
• The cost for computer software apps (Accounting Software, Payroll Software, CRM Software, Microsoft Office, QuickBooks Pro, Project Management Software) – R7,000
• The budget for insurance (general liability, workers’ compensation and property casualty) coverage at a total premium – R5,400.
• Cost for payment of rent for a suitable Office facility with enough space in Cape Town – Western Cape for 12 months at R1.76 per square feet in the total amount of – R85,600.
• The cost for office remodeling (construction of racks and shelves) – R20,000.
• The cost for equipping the office (computers, printers, fax machines, furniture, telephones, filing cabins, safety gadgets and electronics et al) – R15,000
• Other start-up expenses including stationery ($500) and phone and utility deposits ( R2,500 ).
• Operational cost for the first 3 months (salaries of employees, payments of bills et al) – R100,000
• Working capital (investment fund): R2,000,000 (2 Million Rand)
• The cost of launching our official website – R600
• Additional Expenditure (Business cards, Signage, Adverts and Promotions et al) – R5,000

Going by our research and feasibility studies, we will need about R2,200,000 ( 2.2 Million Rand ) to set up a property development company in Cape Town – Western Cape.

In the property development business, the larger your capital base, the greater the opportunities you can access and the more profits you will make. Despite the fact that we have a working capital of 3 Million Rand , we have been able to create a business relationship with our banks so as to easily access loans when the need arises.

Generating Startup Capital for Lucas Polokwane® Property Development Company

Lucas Polokwane® Property Development Company is a business that will be owned and managed by Lucas Polokwane, his immediate family members and other business partners. They decided to restrict the sourcing of the startup capital for the business to just three major sources.

• Generate part of the startup capital from personal savings and sale of stocks
• Generate part of the startup capital from friends and other extended family members
• Generate a larger chunk of the startup capital from the bank

N.B: We have been able to generate about R200,000 ( Personal savings R150,000 and soft loan from family members R50,000 ) and we are at the final stages of obtaining a loan facility of 2 million Rand from the bank. All the papers and documents have been duly signed and submitted, the loan has been approved and any moment from now our account will be credited.

14. Sustainability and Expansion Strategy

The future of a business lies in the number of loyal customers they have, the capacity and competence of their employees, their investment strategy and the business structure. If all these factors are missing from a business, then it won’t be too long before the business closes shop.

One of our major goals of starting Lucas Polokwane® Property Development Company is to build a business that will survive off its own cash flow without the need for injecting finance from external sources once the business is officially running.

We know that one of the ways of gaining approval and winning customers over is to offer our developed properties and services a little bit cheaper than what is obtainable in the market and we are prepared to survive on lower profit margin for a while.

Lucas Polokwane® Property Development Company will make sure that the right foundation, structures and processes are put in place to ensure that our staff welfare are well taken of. Our company’s corporate culture is designed to drive our business to greater heights and training and re – training of our workforce is at the top burner.

We know that if that is put in place, we will be able to successfully hire and retain the best hands we can get in the industry; they will be more committed to help us build the business of our dreams.

Check List/Milestone

• Business Name Availability Check: Completed
• Business Incorporation: Completed
• Opening of Corporate Bank Accounts various banks in South Africa: Completed
• Opening Online Payment Platforms: Completed
• Application and Obtaining Tax Payer’s ID: In Progress
• Application for business license and permit: Completed
• Purchase of Insurance for the Business: Completed
• Renting of Office Facility and remodeling the facility in Cape Town – Western Cape: Completed
• Conducting Feasibility Studies: Completed
• Generating capital from the CEO / President and Business Partners: Completed
• Applications for Loan from our Bankers: In Progress
• Writing of Business Plan: Completed
• Drafting of Employee’s Handbook: Completed
• Drafting of Contract Documents and other relevant Legal Documents: In Progress
• Design of The Company’s Logo: Completed
• Printing of Promotional Materials: Completed
• Recruitment of employees: In Progress
• Purchase of furniture, office equipment, electronic appliances and facility facelift: In progress
• Creating Official Website for the Company: In Progress
• Creating Awareness for the business: In Progress
• Health and Safety and Fire Safety Arrangement: In Progress
• Establishing business relationship with key players in the industry: In Progress

Property Development Business Plan Template

Written by Dave Lavinsky

Property Development Business Plan

Over the past 20+ years, we have helped over 500 entrepreneurs and business owners create business plans to start and grow their property development companies.

If you’re unfamiliar with creating a business plan, you may think creating one will be a time-consuming and frustrating process. For most entrepreneurs it is, but for you, it won’t be since we’re here to help. We have the experience, resources, and knowledge to help you create a great business plan.

In this article, you will learn some background information on why business planning is important. Then, you will learn how to write a property development business plan step-by-step so you can create your plan today.

Download our Ultimate Business Plan Template here >

What is a Property Development Business Plan?

A business plan provides a snapshot of your property development business as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategies for reaching them. It also includes market research to support your plans.

Why You Need a Business Plan for a Property Development Company

If you’re looking to start a property development business or grow your existing property development company, you need a business plan. A proper property development business plan will help you raise funding, if needed, and plan out the growth of your business to improve your chances of success. Your business plan is a living document that should be updated annually as your company grows and changes.

Sources of Funding for Property Development Companies

With regards to funding, the main sources of funding for a property development company are personal savings, credit cards, bank loans, and angel investors. When it comes to bank loans, banks will want to review your business plan and gain confidence that you will be able to repay your loan and interest. To acquire this confidence, the loan officer will not only want to ensure that your financials are reasonable, but they will also want to see a professional plan. Such a plan will give them the confidence that you can successfully and professionally operate a business. Personal savings and bank loans are the most common funding paths for property development companies.

Finish Your Business Plan Today!

How to write a business plan for a property development company.

If you want to start a property development company or expand your current one, you need a business plan. The guide below details the necessary information for how to write each essential component of your property development business plan.

Executive Summary

Your executive summary provides an introduction to your business plan, but it is normally the last section you write because it provides a summary of each key section of your plan.

The goal of your executive summary is to quickly engage the reader. Explain to them the kind of property development business you are running and the status. For example, are you a startup, do you have a business that you would like to grow, or are you operating property development businesses in multiple markets?

Next, provide an overview of each of the subsequent sections of your plan.

• Give a brief overview of the property development and real estate industry.
• Discuss the type of property development business you are operating.
• Detail your direct competitors. Give an overview of your target market.
• Provide a snapshot of your marketing strategy. Identify the key members of your team.
• Offer an overview of your financial plan.

Company Overview

In your company overview, you will detail the type of business you are operating.

For example, you might specialize in one of the following types of property development businesses:

• Single-family detached housing : these types of property developers build free-standing residential buildings for sale.
• Multifamily housing: these types of property developers build apartment buildings, condos, and mixed-use developments.
• Developing and Subdividing Lots: these types of property developers purchase property, either developed or undeveloped, and clear it and prepare it for sale to builders.
• Commercial buildings: these types of property developers build and manage commercial buildings such as shopping centers or offices.

In addition to explaining the type of property development company you will operate, the company overview needs to provide background on the business.

Include answers to questions such as:

• When and why did you start the property business?
• What milestones have you achieved to date? Milestones could include the number of properties developed, reaching X percentage of vacancy/occupancy, reaching X amount of revenue, etc.
• Your legal business Are you incorporated as an S-Corp? An LLC? A sole proprietorship? Explain your legal structure here.

Industry Analysis

In your industry or market analysis, you need to provide an overview of the property development industry.

While this may seem unnecessary, it serves multiple purposes.

First, researching the property development industry educates you. It helps you understand the market in which you are operating.

Secondly, market research can improve your marketing strategy, particularly if your analysis identifies market trends.

The third reason is to prove to readers that you are an expert in your industry. By conducting the research and presenting it in your plan, you achieve just that.

The following questions should be answered in the industry analysis section of your property development business plan:

• How big is the property development industry (in dollars)?
• Is the market declining or increasing?
• Who are the key competitors in the market?
• Who are the key suppliers in the market?
• What trends are affecting the industry?
• What is the industry’s growth forecast over the next 5 – 10 years?
• What is the relevant market size? That is, how big is the potential target market for your property development company? You can extrapolate such a figure by assessing the size of the market in the entire country and then applying that figure to your local population.

Customer Analysis

The customer analysis section of your property development business plan must detail the customers you serve and/or expect to serve.

The following are examples of customer segments: individuals, families, and small businesses.

As you can imagine, the customer segment(s) you choose will have a great impact on the type of property development business you operate. Clearly, families would respond to different marketing promotions than businesses, for example.

Try to break out your target customers in terms of their demographic and psychographic profiles. With regards to demographics, including a discussion of the ages, genders, locations, and income levels of the potential customers you seek to serve.

Psychographic profiles explain the wants and needs of your target customers. The more you can recognize and define these needs, the better you will do in attracting and retaining your customers.

Finish Your Property Development Business Plan in 1 Day!

Don’t you wish there was a faster, easier way to finish your business plan?

With Growthink’s Ultimate Business Plan Template you can finish your plan in just 8 hours or less!

Competitive Analysis

Your competitive analysis should identify the indirect and direct competitors your business faces and then focus on the latter.

Direct competitors are other property development businesses.

Indirect competitors are other options that customers have to purchase from that aren’t directly competing with your product or service. This includes realtors, foreclosure markets, rental housing, or companies purchasing and remodeling their own building. You need to mention such competition as well.

For each such competitor, provide an overview of their business and document their strengths and weaknesses. Unless you once worked at your competitors’ businesses, it will be impossible to know everything about them. But you should be able to find out key things about them such as

• What types of customers do they serve?
• What type of property development company are they?
• What is their pricing (premium, low, etc.)?
• What are they good at?
• What are their weaknesses?

With regards to the last two questions, think about your answers from the customers’ perspective. And don’t be afraid to ask your competitors’ customers what they like most and least about them.

The final part of your competitive analysis section is to document your areas of competitive advantage. For example:

• Will you provide finance packages?
• Will you offer amenities or services that your competition doesn’t?
• Will you provide better customer service?
• Will you offer better pricing?

Think about ways you will outperform your competition and document them in this section of your plan.  

Marketing Plan

Traditionally, a marketing plan includes the four P’s: Product, Price, Place, and Promotion. For a property development company, your marketing strategy should include the following:

Product : In the product section, you should reiterate the type of property development company that you documented in your company overview. Then, detail the specific products or services you will be offering. For example, will you specialize in single-family detached housing, mixed use developments, or shopping centers?

Price : Document the prices you will offer and how they compare to your competitors. Essentially in the product and price sub-sections of your plan, you are presenting the project types and/or services you offer and their prices.

Place : Place refers to the site of your property development company. Document where your company is situated and mention how the site will impact your success. For example, is your property development business located in a business or industrial district, or is it a standalone office surrounded by models? Discuss how your site might be the ideal location for your customers.

Promotions : The final part of your property development marketing plan is where you will document how you will drive potential customers to your location(s). The following are some promotional methods you might consider:

• Advertise in local papers, radio stations and/or magazines
• Reach out to websites
• Distribute flyers
• Engage in email marketing
• Advertise on social media platforms
• Improve the SEO (search engine optimization) on your website for targeted keywords

Operations Plan

While the earlier sections of your business plan explained your goals, your operations plan describes how you will meet them. Your operations plan should have two distinct sections as follows.

Everyday Short-Term Processes

In this section, include all of the tasks involved in running your property development business, including answering calls, meeting with potential customers, performing construction, showing properties, etc.

Long-Term Goals

Your long-term goals are the milestones you hope to achieve. These could include the dates when you expect to sell your Xth home, or when you hope to reach $X in revenue. It could also be when you expect to expand your business to a new city.  

Management Team

To demonstrate your property development business’ potential to succeed, a strong management team is essential. Highlight your key players’ backgrounds, emphasizing those skills and experiences that prove their ability to grow a company.

Ideally, you and/or your team members have direct experience in managing property development businesses. If so, highlight this experience and expertise. But also highlight any experience that you think will help your business succeed.

If your management team is lacking, consider assembling an advisory board. An advisory board would include 2 to 8 individuals who would act as mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in managing a property development business or successfully running a construction project management firm.  

Financial Plan

Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance sheet, and cash flow statements.

Income Statement

An income statement is more commonly called a Profit and Loss statement or P&L. It shows your revenue and then subtracts your costs to show whether you turned a profit or not.

In developing your income statement, you need to devise assumptions. For example, will you develop 5 or 25 properties per quarter, and/or offer property management services? And will sales grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.

Balance Sheets

Balance sheets show your assets and liabilities. While balance sheets can include much information, try to simplify them to the key items you need to know about. For instance, if you spend $50,000 on building out your property development business, this will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a lender writes you a check for $50,000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.

Cash Flow Statement

Your cash flow statement will help determine how much money you need to start or grow your business, and ensure you never run out of money. What most entrepreneurs and business owners don’t realize is that you can turn a profit but run out of money and go bankrupt.

When creating your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing a property development business:

• Cost of construction equipment and supplies
• Cost of contract labor
• Cost of office space and office supplies
• Payroll or salaries paid to staff
• Business insurance
• Other start-up expenses (if you’re a new business) like legal expenses, permits, computer software, and equipment

Attach your full financial projections in the appendix of your plan along with any supporting documents that make your plan more compelling. For example, you might include your model properties’ blueprints or a breakdown of development types you offer.  

Writing a business plan for your property development company is a worthwhile endeavor. If you follow the template above, by the time you are done, you will truly be an expert. You will understand the property development industry, your competition, and your customers. You will develop a marketing strategy and will understand what it takes to launch and grow a successful property development business.

Don’t you wish there was a faster, easier way to finish your Property Development business plan?

OR, Let Us Develop Your Plan For You

Since 1999, Growthink has developed business plans for thousands of companies who have gone on to achieve tremendous success.   Click here to hire someone to write a business plan for you from Growthink’s team.

Other Helpful Business Plan Articles & Templates

• Business Plans
• Business Ideas
• Business News
• Business Tips
• Testimonials
• Terms And Conditions
• REFUND POLICY
• DELIVERY POLICY
• PRIVACY POLICY
• WHATSAPP SUBSCRIPTION

Select Page

Starting A Rental Property Business in South Africa – Business Plan (PDF, Word & Excel)

Posted by BizBolts | All Articles , Business Ideas , Business Plans

Starting a rental property business in South Africa is a good investment. There are so many attractive places and neighborhoods in South Africa and the need for affordable accommodation has been growing over the years. South Africa has a growing demand for rental properties due to the high rate of urbanization and the rising population. As more people are moving to urban areas for work and education, the demand for rental properties continues to increase, leading to continuous rental income stream for property owners. Being one of the Africa’s  most vibrant and developed nations, the real estate industry in South Africa continues to grow. This can be seen by the size of the property market in the country. Currently, the residential property market in South Africa is valued at over R5 trillion. Plus there is a further R520 billion land officially zoned for commercial and residential development.  This article will outline how to start a rental property investment business in South Africa, and the rental property business plan – PDF, Word and Excel.

Acquiring Rental Properties in South Africa

There are plenty of rental properties to buy available on the market. To find rental properties to buy in South Africa, you can start by conducting market research on areas with high rental demand and strong rental rates. Once you have identified potential locations, you can use online property portals (eg property24.com , and privateproperty.co.za ),classified ads, and real estate agents (eg remax.co.za , seeff.com , pamgolding.co.za and rawson.co.za ) to search for properties that fit your investment criteria. It is important to be proactive and persistent in your search, to ensure that you find profitable rental properties with good returns. Additionally, you may want to consider networking with other real estate investors and attending property auctions as additional ways to find rental properties to buy. By staying informed on market trends and being proactive in your search, you can increase your chances of finding a profitable rental property investment in South Africa. Our rental property business plan include a step by step guide of acquiring properties in South Africa.

Funding For Acquiring Rental Properties

You can get home loans from banks to finance the acquisition of rental properties in South Africa. Banks usually provide you with a mortgage bond covering up to 90% of the purchase price, meaning you will have to contribute 10% for the rental property acquisition, which also acts as a deposit payment. In addition for the 10% deposit, you will also have to pay for the transfer costs and bond registration costs. One of the main advantages of purchasing rental properties using mortgage bonds is that it allows you to leverage your investment. With a mortgage bond, you can purchase a property with only a 10% deposit and borrow the remaining 90% of the purchase price from a bank. This means that you can acquire a more expensive property than you would be able to if you had to pay the full purchase price upfront. For example, if a property costs R500 000, that means you only have to contribute R50 000 towards the purchase price, with the remainder R450 000 coming from the bank.  Another advantage is that mortgage bond repayments are usually spread over a long period of time, which makes it easier to manage cash flow and minimize risk. Also interest on mortgage bonds is tax deductible, which can result in significant tax savings for the property owner. The Excel financial statements of our rental property business plan includes a bank loan amortization table which automatically calculates the monthly repayments that you will make for the mortgage bond.

Finding Tenants For Your Rental Property In South Africa

There are several ways to find tenants for your rental property in South Africa. One of the most effective ways is to advertise your property on various online property portals and classified websites, such as Private Property, Property24, and Gumtree. These platforms attract a large number of property seekers, making it easier to find potential tenants quickly. Another way is to use social media platforms like Facebook, Twitter, and Instagram to market your property to your followers, friends and property groups. You can also put a “For Rent” sign outside the property or distribute flyers in the surrounding area to attract potential tenants who may not be actively searching for a property online. Additionally, you can enlist the services of a reputable property management company that has an existing network of potential tenants and the expertise to market your property effectively. By using these methods, you can easily find suitable tenants for your rental property in South Africa.

Managing Rental Properties

Managing a rental property in South Africa involves various tasks such as finding tenants, collecting rent, handling maintenance issues, and addressing tenant concerns. Landlords can choose to manage their properties on their own, or they can hire a property management company to handle these tasks. Hiring a property management company has the advantage of freeing up the landlord’s time and ensuring that the property is well-maintained and managed professionally. The property management company will typically charge a fee, usually a percentage of the monthly rental income, for their services. However, managing a rental property on your own can also be rewarding, especially if you have experience in property management and are willing to invest the time and effort required to manage the property effectively. Regardless of whether you choose to manage your rental property on your own or use a property management company, it’s important to stay up to date with South African rental laws and regulations to ensure that your property is managed in compliance with the law. All the costs associated with owning and managing rental properties should be included in the buy to let property business plan.

Making Money With Rental Properties In South Africa

Rental income.

One of the obvious ways to make money with buy to let properties in South Africa is through rental income. Rental income refers to the money paid by tenants to occupy your rental property. It is typically paid monthly and can be a reliable source of income for property owners. In South Africa, the rental market is quite strong, with a high demand for rental properties in many areas. This makes rental income a viable option for property investors looking to generate passive income. To maximize your rental income, it is important to set competitive rental rates that are in line with the market value of similar properties in your area. Doing so will help you attract potential tenants and minimize vacancy rates. It is also important to maintain your rental property to a high standard to ensure that tenants are happy and willing to pay the rental amount.

Appreciation in Property Value

Another way of making money with rental properties in South Africa is through appreciation in property value. Property values in South Africa have shown a steady increase over time, making it a viable investment option. The value of properties can increase due to various factors such as economic growth, infrastructure development, and an increase in demand. When the property value increases, the owner can sell the property at a higher price, resulting in a profit. Additionally, if the owner decides to keep the property, the increase in property value can result in higher rental rates and increased cash flow. A well maintained property in a desirable location can increase in value over time. By investing in rental properties for long term growth and taking advantage of appreciation in property value, investors can build significant wealth over time.

Cash Flow Positive Properties (Properties That Pay For Themselves)

Cash flow positive refers to a situation where the rental income generated from the property exceeds the total expenses associated with the property. In other words, it means that the property is generating more rental income than the combined costs of mortgage bond payments, property management fees, rates, levies, insurance premiums, maintenance and repairs, vacancies,  and other related expenses. When a rental property is cash flow positive, it means that the owner is making a profit from the property after accounting for all the expenses. This is a desirable scenario for property owners, as it allows them to generate income from their investment property and potentially build wealth through property appreciation and rental income. Owning a positive cash flow property means the property is essentially paying for itself, your only contribution is the deposit payment, which is usually 10% of the property value, plus bond registration and transfer costs. So you should aim to get cash flow positive properties when you are looking for rental properties to purchase in South Africa – however this depends on your investment strategy as you may opt for properties which are likely to appreciate in value. Our rental property business plan includes a cash flow calculator that automatically calculates whether a property in cash flow positive or not. 

However rental properties are still worthwhile to invest in, even if they are not cash flow positive. This is due to the opportunity to own a property at a cheaper cost as rental income will partially cover your mortgage bond repayments. Also you can benefit from the appreciation in the property value overtime, even though your property is not cash flow positive. When the property value increases, you can sell the property at a higher price, resulting in a profit. 

PRE-WRITTEN RENTAL PROPERTY BUSINESS PLAN (PDF, WORD AND EXCEL): COMPREHENSIVE VERSION, SHORT FUNDING/BANK LOAN VERSION AND AUTOMATED FINANCIAL STATEMENTS

For an in-depth analysis of the rental property investment business in South Africa, purchase our rental property business plan. We decided to introduce the business plans after noting that many South Africans were venturing into the buy to let property business without a full understanding of the industry, market, how to run the business, the risks involved, profitability of the business and the costs involved, leading to a high failure rate of their businesses.

Our business plan will make it easier for you to launch and run a rental property business successfully, fully knowing what you are going into, and what’s needed to succeed in the business. It will be easier to plan and budget as the rental property business plan will lay out all the costs involved in setting up and running the buy to let property business. The business plan is designed specifically for the South African market.

USES OF THE RENTAL PROPERTY INVESTMENT BUSINESS PLAN (PDF, WORD AND EXCEL)

The rental property investment business plan can be used for many purposes including:

• Raising capital from investors/friends/relatives
• Applying for a bank loan
• Start-up guide to launch your rental property investment business
• As a rental property project proposal
• Assessing profitability of the rental property business
• Finding a business partner
• Assessing the initial start-up costs so that you know how much to save
• Manual for current business owners to help in business and strategy formulation

CONTENTS OF THE RENTAL PROPERTY BUSINESS PLAN (PDF, WORD AND EXCEL)

The business plan includes, but not limited to:

• Market Analysis
• Industry Analysis
• 5 Year Automated Financial Statements [ Income statements, cash flow statements, balance sheets, monthly cash flow projections (3 years monthly cash flow projections, the remaining two years annually), cash flow positive calculator, gross rental yield analysis, return on investment analysis, payback period analysis, start-up costs, financial graphs, revenue and expenses, Bank Loan Amortisation]
• Marketing Strategy
• Risk Analysis
• SWOT & PEST Analysis
• Operational Requirements
• Operational Strategy
• Costs associated with purchasing and owning rental properties in South Africa
• Why some South Africans in the rental property business fail, so that you can avoid their mistakes
• Ways to raise capital to start your rental property business in South Africa

The Rental Property Business Plan package consist of 4 files

• Rental Property Business Plan – PDF file (Comprehensive – 116 pages)
• Rental Property Business Plan – Editable Word File (Comprehensive – 116 pages)
• Rental Property Business Plan Funding Version – Editable Word File (Short version for applying for a loan – 49 pages)
• Rental Property Business Plan Automated Financial Statements – (Editable Excel file)

Testimonial 7

Thank you BizBolts for the business plan. I received the business plan immediately after payment, it was money well spent ! I was able to easily edit the business plan. After using the BizBolts business plan, I can wholeheartedly recommend their products and skills.

Testimonial 4

The business plan was very helpful, you did a great job of taking ideas and putting them into words as well as pointing out other aspects of the business plan I wouldn’t have thought of. I got funding using your business plan and it’s now 4 months since I started my poultry business, and everything is going well.

Testimonial 5

The BizBolts poultry business plan led us down the path from start to finish. Contact details of suppliers of key requirements were included in the business plan. It helped us crystallize our strategy, and the business plan was well received by the bank.

Testimonial 2

I am extremely pleased with the business plan and financial statements. The business plan is very detailed & it meets my requirements. I feel better equipped with tools that can help me secure funding.  I would have no hesitation of recommending your business plans to other people.

Testimonial 3

The business plan has a highly professional look and feel. The research really helps me look deep into the market that I am targeting, it’s well suited for the South African market. The business plan clearly outlined everything I need to start the business and the costs. It’s now easier to budget and plan. Thank you very much.

Testimonial 1

Many thanks to the BizBolts team for putting together a fantastic business plan, I could not have done this business plan on my own. I managed to get funding from investors to start my butchery business using your business plan.

Testimonial 6

It is with excitement and pleasure to inform you that I have been successful in securing a loan from my bank. This would not have been possible if not for the BizBolts Business Plan. Thank you for your help, my dreams are now coming true.

GET THE PROPERTY RENTAL BUSINESS PLAN (PDF, WORD AND EXCEL) - R500 Only.

We decided to make the business plan affordable to anyone who would want to start the business, and the price for the pre-written business plan is only 500 Rand.

We have several payment methods which you can use.

Payment Method 1 (Visa card, Mastercard, Credit card, Debit Card)

Click  Buy Now  below to purchase. After you have purchased, you will instantly see the download link for the business plan package on the screen. We will also email you the download link. Get instant access to the business plan now!

If you want to purchase multiple business plans at once using Visa Card/MasterCard then  click here: Business Plans Store

The business plan package is a zipped compressed file containing the PDF, Word and Excel documents. To open the package after downloading it, just right click, and select Extract All. If you have any problems in downloading and opening the files, email us on [email protected] and we will assist you.

Payment Method 2 (Instant EFT - FNB, Absa, Standard Bank, Nedbank, CapitecBank, Investec, TymeBank and African Bank. )

If you want to purchase multiple business plans at once using Instant EFT then  click here: Business Plans Store

Other Payment Methods

• Cash deposit into our FNB Company Bank Account
• EFT Transfer to our FNB Company Bank Account

Call/Whatsapp us on +27606334830 for the other payment methods. (Whatsapp us by clicking the link https://wa.me/27606334830 ). Email: [email protected] .

About The Author

BizBolts (Pty) Ltd is a business research company based in Johannesburg, South Africa. We sell prewritten business plans for various industries including livestock production, crop farming and retail businesses. BizBolts also publishes articles on business ideas, business news, business tips, personal finance, and entrepreneur profiles.

Related Posts

Food Franchises In South Africa

February 4, 2021

Starting a Coffee Shop Business in South Africa – Business Plan (PDF, Word & Excel)

December 14, 2022

How To Register A Small Business In South Africa

February 7, 2021

Starting Orange Farming Business In South Africa

February 19, 2021

Follow Us On Facebook

Subscribe To Our Newsletter

Join our mailing list to receive the latest news and updates from our team.

You have Successfully Subscribed!

Business Plan

A joburg that works is a south africa that works.

The Joburg Property Company was established to support the Council’s economic and social objectives as outlined in the Growth and Development Strategy (GDS) as well as Mayoral strategic priorities aimed at achieving the City vision of “A Joburg that works is a South Africa that works”. JPC’s primary goal in supporting the vision and mission of the 2040 Growth and Development Strategy (GDS) is to recognize the emphasize its role as an economic and social property agency to achieve positive developmental outcomes.

• 2023/2024 Business Plan
• 2022/2023 Business Plan

2019/2020 Business Plan

2018 – 2019 Business Plan

2017 – 2018 Business Plan

2016 – 2017 Business Plan

2015 – 2016 Business Plan

2014 – 2015 Business Plan

2013 – 2014 Business Plan

2012 – 2013 Business Plan

2011 – 2012 Business Plan

Career Advice

Apr 11, 2019

Starting your Own Property Development Business

The South African property market suffered a significant dip prior to mid-2017, however, it finally seems to be recovering. Since September 2017, property prices have gradually risen – reigniting the market after nearly a decade of weak performance, 1  providing opportunities for emerging developers in South Africa. But, as with the founding of any business, there are far more factors to consider than only the opportunity for growth. If you are thinking of starting a property development business, here are the necessary steps to implement to get you on your way.

1. Acquire the knowledge

It’s vital that educating yourself about the property market is your first step: read property development blogs , watch for property growth reports or past development statistics 2 and learn to identify investment opportunities .

Before embarking on the journey of beginning your own business, make sure you’re well equipped to manage and lead its development. Discover your local competition, understand legislation, property taxes, and your potential target markets. Without acquiring knowledge of the local property industry, its past and future, you will find it difficult to accurately build a business plan that is suitably aligned to your business objectives. 3

2. Build a business plan

Now that you understand your local market and industry, you are in a position to develop long-term goals. It’s important to consider the larger business outcomes when you create the initial foundation of the business plan. 4  Perhaps you want to introduce new affordable property investment options to lower-income brackets, or your business goals aim to create entirely “green” apartment blocks for the city. Whatever your long-term objectives, your business plan should be able to support you in reaching them. 5

Since September 2017, property prices have gradually risen – reigniting the market after nearly a decade of weak performance

Once you’ve settled on your position within the market, you can begin using market research (looking at competitors, and growth opportunities), financial projections (required budgets, cash flow projections, and available tenders) and knowledge of local property law to set your short-term goals. 6 The following steps will see you hiring a team to support the different roles required (property strategists, real estate agents, financial strategists, conveyancers, contractors, engineers, etc.), settling on the nature of your first projects, and giving yourself clear return-on-investments to reach. 7

Learn how to make intelligent investment decisions, conduct property management effectively, and navigate the landscape of property development and entrepreneurship with this online short course.

Entrepreneur Magazine aptly summarises it, “[w]ithout a sound business plan, you’ll be unable to find funding […] it’s also the blueprint of the business and the best way to test whether or not the business is feasible.” 8 Your business plan becomes that much more pertinent if you’re relying on investors to fund the capital growth for your business in its early stages.

The best way to learn is experience

Starting a business is exciting, but it is always going to require that you’re willing to learn and tweak your business’s goals/plan as you progress. As you look at your initial developments, keep the following in mind.

• Location and timing: Property prices are heavily influenced by social, economic, political, and geographic factors. 9 Being aware of trends like the increased rate of commercial property developments in South African city centres will help guide you in making the right investment decisions. 10
• Zoning and title deeds: Every property is zoned for a particular purpose, and being aware of such will help inform your investment and development decisions. 11  Property conditions differ depending on location and property type – these regulations are laid out in the title deed (which can be found in the Deed Registries Office in South Africa), 12 and decide whether or not the conditions fit in with your plans.
• Building regulations: Changes and updates to building regulations require property developers to keep an eye on new legislation and policies as they are introduced. 13 The penalties for not following regulation can be hefty enough to sink young businesses. 14
• Property management: You’ll need to continually reassess built environments according to new legislation, social issues (i.e. water restrictions are increasing the desire for water saving instalments in Western Cape dwellings), 15  and tenants’ needs. 16 However, property maintenance should be focused on longevity, rather than trends or frugality. 17
• Grading levels: There are nine grading levels in South Africa, which limit the value of government tender (a public request for contracted services or products) that companies can apply for. 18 If you plan on applying for private or government tenders, it is vital you know which grading level you fall into (which is decided on according to annual turnover, track record, capability, and capital). 19

Adrien Goslett, CEO of RE/MAX, has recently stated that he anticipates “reinvestment (both local and foreign) in the country post-election if the fight against corruption continues and tough decisions are made”, and went on to say with hope that “[g]reater stability should lead to consumer confidence, and with that a more buoyant real estate market”. 20 While our economy has been slow and volatile in past years, there is optimism for the future, which provides a good foundation of opportunity for emerging property development businesses in South Africa. 

Click here to view sources

• 1 (Feb, 2018). ‘South Africa’s housing market accelerates’. Retrieved from Global Property Guide .
• 2 Yardney, M. (Aug, 2018). ‘How to get started in property development’. Retrieved from Property Update .
• 3 Yardney, M. (Aug, 2018). ‘How to get started in property development’. Retrieved from Property Update .
• 4 Rampton, J. (Aug, 2016). ‘7 steps to a perfectly written business plan’. Retrieved from Entrepreneur .
• 5 (May, 2018). ‘How to start a property development business’. Retrieved from Entrepreneur Mag .
• 6 (May, 2018). ‘How to start a property development business’. Retrieved from Entrepreneur Mag .
• 7 Yardney, M. (Aug, 2018). ‘How to get started in property development’. Retrieved from Property Update .
• 8 (May, 2018). ‘How to start a property business’. Retrieved from Entrepreneur Mag .
• 9 (Jan, 2018). ‘The outlook for South Africa’s property market in 2018’. Retrieved from Private Property .
• 10 Smith, C. (Oct, 2017). ‘Increase in rate of commercial property development’. Retrieved from fin24 .
• 11 (May, 2018). ‘How to start a property development business’. Retrieved from Entrepreneur Mag .
• 12 (May, 2018). ‘How to start a property business’. Retrieved from Entrepreneur .
• 13 (Feb, 2018). ‘Building regulations and by-laws’. Retrieved from MBA North .
• 14 Talane, V. (June, 2013). ‘R1,5bn Construction fines’. Retrieved from Corruption Watch .
• 15 Stevens, P. (Jan, 2018). ‘The outlook for South Africa’s property market in 2018’. Retrieved from Private Property .
• 16 Yardney, M. (Aug, 2018). ‘How to get started in property development’. Retrieved from Property Update .
• 17 (Nd). ‘Regular property maintenance reduces long term costs’. Retrieved from Trafalgar . Accessed on 14 March 2019
• 18 (May, 2018). ‘How to start a property business’. Retrieved from Entrepreneur .
• 19 (May, 2018). ‘How to start a property business’. Retrieved from Entrepreneur .
• 20 (Dec, 2018). ‘SA’s property marketing in 2019: predictions and expectations’. Retrieved from Property 24 .

Filed under: Real estate

Social share:

Related Reading

Real estate

Sign up to our newsletter

By consenting to receive communications, you agree to the use of your data as described in our privacy policy . You may opt out of receiving communications at any time.

Success! You have been subscribed.

Visit our blog to see the latest articles.

• Publisher Home

PROPERTY DEVELOPMENT: A BUSINESS PROCESS MODEL

Main article content.

Property Development, Business process, Built Environment, Real Estate

Property development constitutes one of the largest business enterprises and gross domestic product contributors of the world. The business of property development however incurred substantial losses over the centuries as a result of non-compliance to good governance in terms of considering all factors influencing perceived success of property development projects. The primary objective of this study was to develop a business process model for perceived success of property development projects, enterprises and role players. This model should guide role players, enterprises and actors within the property development business towards pro-active, effective and relevant decision making in achieving success in property development. To address the primary objective, a number of secondary objectives were raised whereby a conceptual model constituting identified variables was developed based on a comprehensive survey of the related literature. Appropriate hypotheses were formulated constructing a path diagram between the dependant variable and subsequent anteceding and intervening variables. Data was gathered using an electronic survey measuring primary data sourced from the identified international population of property development practitioners. This data was empirically analysed by means of structural equation modelling. The factors were namely financial risk forecast, consumer confidence and ability, procurement, urban planning, financial feasibility and practical viability considerations and professional feasibility and viability reporting, identified in the business process model affecting success of property development projects. This research broke new ground relative to the profession of property development in introducing the business process model for perceived success of property development.

Article Metrics Graph

Article sidebar, article details.

The Journal of Construction Project Management and Innovation (JCPMI) is committed to the principles of Open Access publishing and upholds the ethos of freely disseminating research findings to enhance knowledge and understanding within the field of construction project management and innovation.

In accordance with our commitment to open scholarly communication, all articles published by JCPMI are licensed under the Creative Commons Attribution-NonCommercial 4.0 International License (CC BY-NC). This licensing agreement allows others to distribute, remix, adapt, and build upon the work non-commercially, as long as the original author and source are credited. The license also ensures that authors retain copyright over their work while allowing the wider community to access, use, and build upon the content.

The terms of the CC BY-NC license are designed to facilitate the following:

• Attribution: Users must give appropriate credit, provide a link to the license, and indicate if changes were made. This can be done in any reasonable manner, but not in any way that suggests the licensor endorses the user or their use.
• Non-Commercial: Users may not use the material for commercial purposes.
• No Additional Restrictions: Users may not apply legal terms or technological measures that legally restrict others from doing anything the license permits.

By publishing with JCPMI, authors agree to these terms and ensure that their work is accessible and reusable under the conditions of the CC BY-NC license, thereby contributing to the ongoing exchange of knowledge and information in an Open Access environment.

Creative Commons CC Attribution-NonCommercial 4.0 International Public License

How to Cite

• Endnote/Zotero/Mendeley (RIS)

Similar Articles

• J.I.T Buertey, F. Abeere-Inga, T.A Kumi, PRACTICAL APPLICATION OF RISK MANAGEMENT TECHNIQUES IN INFRASTRUCTURAL DELIVERY: A CASE STUDY OF GHANAIAN CONSTRUCTION INDUSTRY , Journal of Construction Project Management and Innovation: Vol. 2 No. 1 (2012): Journal of Construction Project Management and Innovation
• Judith T. OJO-AROMOKUDU, Claudia LOGGIA , SELF-HELP CONSOLIDATION CHALLENGES IN LOW-INCOME HOUSING IN SOUTH AFRICA , Journal of Construction Project Management and Innovation: Vol. 7 No. Supplement (2017): Journal of Construction Project Management and Innovation
• Bankole AWUZIE, Fidelise EMUZE, ENABLING SUSTAINABLE PROCUREMENT OF BUILT ASSETS IN AFRICAN UNIVERSITIES: PERSPECTIVES OF FACILITIES’ DIRECTORS , Journal of Construction Project Management and Innovation: Vol. 6 No. Supplement (2016): Journal of Construction Project Management and Innovation
• Rasheed Babatunde ISA, Fidelise EMUZE, Dillip Kumar DAS, CONCEPTUAL TRANSFORMATION PROCESS MODEL FOR SUSTAINABILITY IN THE INFRASTRUCTURE SECTOR , Journal of Construction Project Management and Innovation: Vol. 6 No. Supplement (2016): Journal of Construction Project Management and Innovation
• Temitope Omotayo, Udayangani Kulatunga, A CONTINUOUS IMPROVEMENT FRAMEWORK USING IDEF0 FOR POST-CONTRACT COST CONTROL , Journal of Construction Project Management and Innovation: Vol. 7 No. 1 (2017): Journal of Construction Project Management and Innovation
• Mylan Jonas, Gerrit Crafford, Sibulelokuhle Xulaba, David Edwards, The dynamics of learning styles and adaptive flexibility in quantity surveying education: implications for academic performance , Journal of Construction Project Management and Innovation: Vol. 13 No. 2 (2023): Journal of Construction Project Management and innovation
• L WENTZEL, John SMALLWOOD, Fidelise EMUZE, IMPROVING THE BUSINESS TRAJECTORY AMONG SMALL AND MEDIUM SIZE CONSTRUCTION FIRMS IN SOUTH AFRICA , Journal of Construction Project Management and Innovation: Vol. 6 No. 2 (2016): Journal of Construction Project Management and Innovation
• Temitope Omotayo, Udayangani Kulatunga, A GEMBA KAIZEN MODEL BASED ON BPMN FOR SMALL- AND MEDIUM-SCALE CONSTRUCTION BUSINESSES IN NIGERIA , Journal of Construction Project Management and Innovation: Vol. 7 No. 1 (2017): Journal of Construction Project Management and Innovation
• Philip McAleenan, Ciaran McAleenan, RECONCEIVING CONSTRUCTION IN THE CONTEXT OF HUMANISATION , Journal of Construction Project Management and Innovation: Vol. 7 No. 2 (2017): Journal of Construction Project Management and Innovation
• Alireza MOGHAYEDI, Karen Le Jeune, Mark Massyn, Christiana Ekpo, ESTABLISHING THE KEY ELEMENTS OF INCORPORATION AND OUTCOMES OF 4TH INDUSTRIAL REVOLUTION IN BUILT ENVIRONMENT EDUCATION: A MIXED BIBLIOGRAPHIC AND BIBLIOMETRIC ANALYSIS , Journal of Construction Project Management and Innovation: Vol. 10 No. 1 (2020): Journal of Construction Project Management and Innovation

1-10 of 167 Next

You may also start an advanced similarity search for this article.

Most read articles by the same author(s)

• Eric Kwame SIMPEH, John SMALLWOOD, ANALYSIS OF THE BENEFITS OF GREEN BUILDING IN SOUTH AFRICA , Journal of Construction Project Management and Innovation: Vol. 8 No. 2 (2018): Journal of Construction Project Management and Innovation
• Erich HAYDAM, John SMALLWOOD, MENTAL STRESS AMONG CIVIL ENGINEERING CONSTRUCTION SITE AGENTS AND FOREMEN IN THE NELSON MANDELA BAY METROPOLE , Journal of Construction Project Management and Innovation: Vol. 6 No. 1 (2016): Journal of Construction Project Management and Innovation
• Victor OKORIE, Fidelise Emuze, John SMALLWOOD, Jacobus VAN WYK, A QUALITATIVE REVIEW OF THE HEALTH AND SAFETY LEADERSHIP ROLES OF MANAGERS IN SOUTH AFRICAN CONSTRUCTION , Journal of Construction Project Management and Innovation: Vol. 4 No. 2 (2014): Journal of Construction Project Management and Innovation
• John Smallwood, Fidelis Emuze, Charissa BLOOMBERG Bloomberg, EXPLORING THE IMPORTANCE OF EMOTIONAL QUOTIENT IN CONSTRUCTION: PERSPECTIVES FROM HEALTH AND SAFETY PROFESSIONALS IN SOUTH AFRICA , Journal of Construction Project Management and Innovation: Vol. 4 No. 1 (2014): Journal of Construction Project Management and Innovation
• Geraldine J. KIKWASI, John SMALLWOOD, CONSTRUCTION HEALTH AND SAFETY (H&S) PERFORMANCE IMPROVEMENT: ARE CLIENTS AND CONSULTANTS PLAYING THEIR PART? , Journal of Construction Project Management and Innovation: Vol. 6 No. 1 (2016): Journal of Construction Project Management and Innovation
• John SMALLWOOD, Claire DEACON, THE PERFORMANCE OF CONSTRUCTION HEALTH AND SAFETY OFFICERS , Journal of Construction Project Management and Innovation: Vol. 7 No. 2 (2017): Journal of Construction Project Management and Innovation

Modal Header

How to Start a Property Business

Updated on 14 April 2023

Starting a property business is appealing to many entrepreneurs. There’s a lot of money to be made in property, and property has always been regarded as a reliable investment option.

The good news is that there are also many different paths you can take if you want to start a property business. While developing and investing in property is where the big business lies , you can always get a foot in the door through other approaches.

To help you get started, here’s a quick guide on what you need to know about starting a property business.

Establish What Type Of Property Business You Want to Start

First of all, you need to establish what type of property business you will run. Many business opportunities exist involving property.

Some of the most popular options include:

• Property development
• Renting out property as a landlord (commercial or residential)
• Flipping properties
• Managing properties
• Bird dogging properties
• Selling properties as a real estate agent
• Offering property-related services (law, real estate photography, accounting services, etc)

Of course, if you’re looking to start a property business, you’re probably thinking of investing in property. However, if this is not financially viable, there are still other ways to enter the property business.

How to Invest in a Property Portfolio

The biggest challenge to starting a property business is finding the capital to invest in your property portfolio. While this may seem daunting, there are various options available to those looking to invest in property.

Apply for a Home Loan

The most common strategy for purchasing property is through a home loan . This is when the bank finds the property, which you pay back through instalments. Ideally, you’ll be able to put down a large enough deposit to gain a better interest rate and lower monthly instalments.

Other People’s Money (OPM)

Using other people’s money to invest in property is a strategy that many property investors use. To do this, you’ll need to partner with other investors to purchase a property. These kinds of partnerships need to be mutually beneficial, where each partner plays on their strengths.

Other People’s Property (OPP)

Taking an OPP approach is when the seller funds the purchase of the property by themself under the agreement that you will pay them the value of the property over time.

Purchasing Shares

If you’re not ready to invest in direct property ownership, you can invest in property shares. This could be done via a broker or on the stock market.

Look for Property That Will Generate a Profit

If you’re investing in property as a business, you’ll want to look for an affordable property that will be able to generate a profit from the start. One of the best ways to do this as a beginner is to buy a property to let.

This is when you purchase a property to rent it out and you use the rental income to cover the property purchase. To do this successfully, you’ll need to find a property and area where you can consistently generate a rental income.

Ideally, you’ll also want to try to find a property that will significantly increase in value over time. It’s important that you weigh up the price, yield, and risk factors associated with the property to help you find the best possible property for your business.

Steps to Start a Property Business

Once you have established what type of property business you want to start, you’ll need to take the right steps to set your business up.

No matter what kind of property business you’re going to establish, here are the general steps you’ll need to take to do it :

• Develop a business plan outlining your property business’s scope, goals, and strategy
• Conduct in-depth market research to understand your target audience, competition, and industry trends. Of course, you’ll also need to understand the state of the property market
• Secure financing or investment for the business, if necessary
• Register your business with the CIPC and obtain any necessary licenses and permits
• Develop a marketing strategy to promote your business and attract customers
• Hire staff or contractors, if needed, and establish an operational plan for the business
• Launch the business and continually evaluate and adjust your strategies based on your business performance and market changes

These are the basic considerations you need to make when starting a property business. Although, each property business is unique, and will have its own specific requirements. This is why it’s so important to thoroughly understand your particular business model and its requirements when you get your business off the ground.

Get Weekly 5-Minutes Business Advice

Subscribe to receive actionable business tips and resources.

RELATED ARTICLES

What Is Needed to Start a Poultry Farm Business

Four Ways to Start Farming in South Africa

Tenders for Small Businesses in South Africa

8 Useful Catering Business Ideas

Feeling Stuck?

• [email protected]
• www.smesouthafrica.co.za
• Advertise with Us
• Apply For Funding

Copyright ©2024 | SME South Africa | Designed and Developed by Adclickafrica

TERMS & CONDITIONS | PRIVACY POLICY

Find Expert Answers

Add sme south africa to your homescreen.

Property Development Business Plan Template

Written by Dave Lavinsky

Property Development Business Plan

You’ve come to the right place to create your Property Development business plan.

We have helped over 1,000 entrepreneurs and business owners create business plans and many have used them to start or grow their property development companies.

Below is a template to help you create each section of your Property Development business plan.

Executive Summary

Business overview.

Redstone Development is a new property development company located in Salt Lake City, Utah. We focus on residential property development for single-family and multi-family homes. We handle all steps of the process, from sourcing the land to selling the finished property. Redstone Development aims to be the most trusted source of affordable housing in the Salt Lake City metro area.

Redstone Development is owned and operated by Jack Grant, a real estate development industry veteran who is well-versed in the entire property development process. Jack has over 30 years of experience developing residential properties and holds a Master’s in Real Estate Development. His education, experience, and industry connections will ensure that Redstone Development becomes one of the area’s most successful property development businesses.

Product Offering

Redstone Development will handle the entire development process, including sourcing land, securing all necessary approvals and permits, construction, and sale of the finished property.

The company focuses on building single-family homes and multi-family apartment complexes in the heart of Salt Lake City. All projects are designed to make these homes aesthetically appealing and luxurious. However, they will also be affordable to ensure that anyone in the Salt Lake City area can afford to live in our properties.

Customer Focus

Redstone Development will serve home buyers and real estate investors who live and work in Salt Lake City, Utah, or the surrounding area. Salt Lake City is a growing city in need of additional housing. More people come to this beautiful city every year, which reduces the number of available homes and apartment units. Therefore, we will target buyers who are struggling to find affordable housing.

Furthermore, there are thousands of first-time home buyers in the area. These buyers are an ideal target market for the company.

Management Team

Redstone Development will be owned and operated by Jack Grant. He recruited his former administrative assistant, Sheila Johnson, to be his Office Manager and help manage the office and operations.

Jack has over 30 years of experience developing residential properties and worked for several of our competitors. He also holds a Master’s in Real Estate Development from the University of Utah. His education, experience, and industry connections will ensure that Redstone Development becomes one of the area’s most successful real estate development businesses.

Sheila Johnson has been Jack Grant’s loyal administrative assistant for over ten years at a former property development firm. Jack relies strongly on Sheila’s diligence, attention to detail, and focus when organizing his clients, schedule, and files. Sheila has worked in the property development industry for so long that she understands all aspects required to run a successful property development company.

Jack will also employ several other full-time and part-time staff to assist with all aspects of running a real estate development business.

Success Factors

Redstone Development will be able to achieve success by offering the following competitive advantages:

• Location: Redstone Development’s office is near the center of town, in the shopping district of the city. It is visible from the street, where many residents shop for both day-to-day and luxury items.
• Client-oriented service: Redstone Development will have a full-time assistant with property development experience to keep in contact with clients and answer their everyday questions. Jack realizes the importance of accessibility and will further keep in touch with his clients through monthly newsletters.
• Management: Jack has been highly successful working in the property development sector. His unique qualifications will serve customers in a much more sophisticated manner than many of Redstone Development’s competitors.
• Relationships: Having worked and lived in the community his whole life, Jack knows many local leaders, real estate agents, and other influencers in the local property development industry.

Financial Highlights

Redstone Development is seeking $1,000,000 in debt financing to launch its property development business. The funding will be dedicated to purchasing our first property, construction costs, securing the office space, and purchasing office equipment and supplies. Funding will also be dedicated toward six months of overhead costs, including payroll, rent, and marketing costs. The breakout of the funding is below:

• Office space build-out: $50,000
• Office equipment, supplies, and materials: $20,000
• Land purchase and construction expenses: $530,000
• Six months of overhead expenses (payroll, rent, utilities): $250,000
• Marketing costs: $50,000
• Working capital: $100,000

The following graph below outlines the pro forma financial projections for Redstone Development.

Company Overview

Who is redstone development.

Redstone Development is a new property development company located in Salt Lake City, Utah. We focus on residential property development for single-family and multi-family homes. We handle all steps of the property development process, from sourcing the land to selling the finished property. Redstone Development aims to be the most trusted source of affordable housing in the Salt Lake City metro area.

Redstone Development is owned and operated by Jack Grant, who is a real estate development industry veteran and well-versed in the entire property development process. Jack has over 30 years of experience developing residential properties and holds a Master’s in Real Estate Development. His education, experience, and industry connections will ensure that Redstone Development becomes one of the area’s most successful property development businesses.

Redstone Development’s History

After 30 years of working in the property development industry, Jack Grant began researching what it would take to create his own property development company. This included a thorough analysis of the costs, market, demographics, and competition. Jack has compiled enough information to develop his business plan and approach investors.

Once his market analysis was complete, Jack began surveying the local office spaces available and located an ideal location for the property development headquarters. Jack incorporated Redstone Development as a Limited Liability Corporation on October 1st, 2022.

Once the lease is finalized on the office space, renovations can be completed to make the office a welcoming environment to meet with clients.

Since incorporation, Redstone Development has achieved the following milestones:

• Located available office space for rent that is ideal for meeting with clients
• Identified the first property to develop
• Developed the company’s name, logo, and website
• Hired an interior designer for the decor and furniture layout
• Determined equipment and fixture requirements
• Began recruiting key employees

Redstone Development’s Services

Redstone Development will handle the entire property development process, including sourcing land, securing all necessary approvals and permits, construction, and sale of the finished property.

Industry Analysis

The real estate and property development industries have been strong over the past few years. As of 2021, the real estate industry was valued at $3.69 trillion and is expected to grow at a compound annual growth rate of 5.2% from now until 2030.

This growth will be driven by increasing demand for personal housing. Millennials and Gen-Z are beginning to rent their first apartments or buy their first homes. After years of living with family or roommates, they are ready to have a space to call their own. This trend is leading to a substantial demand for housing that many cities are struggling to supply.

The main challenge to the property development industry is the decrease in market size in the land development industry. Over the past five years, the industry saw an average annual decline of 0.7%. However, we believe that the pandemic was a considerable factor in this decline. Currently, the land development market is valued at $12 billion USD, and we expect it to grow substantially due to the growth of similar industries and the increasing demand for housing, as mentioned above.

Customer Analysis

Demographic profile of target market.

Redstone Development will serve home buyers and real estate investors in Salt Lake City, Utah, and its surrounding areas.

The community of Salt Lake City has thousands of first-time home buyers, residential real estate investment firms, and people looking for affordable housing options in the area. The company will also target millennials specifically since the majority of first-time home buyers are in this age group.

The precise demographics for Salt Lake City, Utah are:

Customer Segmentation

Redstone Development will primarily target the following customer profiles:

• Home buyers
• Real estate investors
• Millennials
• Apartment/Condominium management companies

Competitive Analysis

Direct and indirect competitors.

Redstone Development will face competition from other companies with similar business profiles. A description of each competitor company is below.

Upscale Property Developers, Inc.

Upscale Property Developers, Inc. is a property development company in Salt Lake City. In business for over 40 years, Upscale Property Developers, Inc. provides oversight for the entire property development process for new single-family and multi-family residences, commercial offices, and government buildings across the area. Upscale Property Developers, Inc also offers a variety of property renovation, demolition, and revitalization services for existing buildings.

Although Upscale Property Developers, Inc. provides homes with a luxury aesthetic, they are also the most expensive property developments on the market, thus resulting in many first-time home buyers being priced out of the market.

Premium Property Development Solutions

Established in 1990, Premium Property Development Solutions is a property developer of new commercial and residential properties in Salt Lake City. The company specializes in eco-friendly building materials and upscale design options for individual and corporate clients. Clients can customize their building design or choose from a variety of standard design options. The company employs experienced property developers and designers who are well-versed in green building design.

Premium Property Development Solutions is more affordable than Upscale Property Developers Inc. but is still out of most first-time home buyers’ price ranges.

Salt Lake Residential

Salt Lake Residential is also a local property development company that manages the complete property development process from sourcing and permitting to construction and sale. They are mostly known for their unique apartment complex designs but are equipped to take on a variety of different builds. The company has been in business for about ten years and has developed a reputation for building quality homes for affordable prices.

Although Salt Lake Residential has a similar value proposition of luxury homes at affordable prices, this company lacks the green building and eco-efficiency component to their business model, thus losing out on business from eco-conscious home buyers.

Competitive Advantage

Redstone Development enjoys several advantages over its competitors. Those advantages include:

• Location: Redstone Development’s office is near the center of town, in the city’s shopping district. It is visible from the street, where many residents shop for both day-to-day and luxury items.

Marketing Plan

Brand & value proposition.

Redstone Development will offer the following unique value proposition to its clientele:

• Service built on long-term relationships and personal attention
• Big-firm expertise in a small-firm environment
• Client-focused property development, where the company’s interests are aligned with the client
• Effective project management
• Affordable pricing

Promotions Strategy

The promotions strategy for Redstone Development is as follows:

Website/SEO

Redstone Development will invest heavily in developing a professional website that displays all of the features and benefits of the property development company. It will also invest heavily in SEO so the brand’s website will appear at the top of search engine results.

Social Media

Redstone Development will invest heavily in a social media advertising campaign. The marketing manager will create the company’s social media accounts and invest in ads on all social media platforms. It will use targeted marketing to appeal to the target demographics.

Print Advertising

The company will invest in professionally designed advertisements to be printed in real estate publications. Redstone Development will also list its properties for sale in key local publications, including newspapers, area magazines, and its own newsletter.

Community Events/Organizations

The company will promote itself by distributing marketing materials and participating in local community events, such as local festivals, business networking, or sporting events.

Redstone Development’s pricing will be moderate so consumers feel they receive great value when purchasing properties from the company.

Operations Plan

The following will be the operations plan for Redstone Development.

Operation Functions:

• Jack Grant will be the Owner and President of the company. He will oversee all staff and manage client relations. He will also oversee all major aspects of the development projects. Jack has spent the past year recruiting the following staff:
• Sheila Johnson – Office Manager who will manage the office administration, client files, and accounts payable.
• Kenneth Bohannon – Staff Accountant will provide all client accounting, tax payments, and monthly financial reporting.
• Beth Martinez – Marketing Manager who will provide all marketing for Redstone Development and each property it manages.
• Jack will also hire a team of architects, engineers, interior designers, and contractors to design and build the properties.

Milestones:

The following are a series of steps that lead to our vision of long-term success. Redstone Development expects to achieve the following milestones in the following six months:

1/1/202X         Finalize lease agreement

2/1/202X         Design and build out Redstone Development

3/1/202X         Hire and train initial staff

4/1/202X         Purchase first property for development

5/1/202X         Kickoff of promotional campaign

6/1/202X         Find second property for development

Jack has over 30 years of experience developing residential properties and worked for several of our competitors. He also holds a Master’s in Real Estate Development from the University of Utah. His education, experience, and industry connections will ensure that Redstone Development becomes one of the area’s most successful property development businesses.

Jack will also employ several other full-time and part-time staff to assist with all aspects of running a real estate development business as outlined in the Operations Plan.

Financial Plan

Key revenue & costs.

Redstone Development’s revenues will come primarily from the sale of completed properties. The company will sell new single-family homes, multi-family townhomes, and apartment complexes/condominium properties to individual buyers and investors.

The cost drivers will be the overhead costs required to staff a property development office. The expenses will be the payroll cost, rent, utilities, office supplies, and marketing materials.

Funding Requirements and Use of Funds

Key assumptions.

The following outlines the key assumptions required to achieve the revenue and cost numbers in the financials and to pay off the startup business loan.

• Average monthly payroll expenses: $50,000
• Office lease per year: $100,000

Financial Projections

Income statement.

Balance Sheet

Cash Flow Statement

Property Development Business Plan FAQs

What is a property development business plan.

A property development business plan is a plan to start and/or grow your property development business. Among other things, it outlines your business concept, identifies your target customers, presents your marketing plan and details your financial projections.

You can easily complete your Property Development business plan using our Property Development Business Plan Template here .

What are the Main Types of Property Development Businesses?

There are a number of different kinds of property development businesses , some examples include: Single-family detached housing, Multifamily housing, Developing and Subdividing Lots, and Commercial buildings.

How Do You Get Funding for Your Real Estate Development Business Plan?

Property Development businesses are often funded through small business loans. Personal savings, credit card financing and angel investors are also popular forms of funding. This is true for a real estate developer business plan and a real estate investment business plan template.

What are the Steps To Start a Property Development Business?

Starting a property development business can be an exciting endeavor. Having a clear roadmap of the steps to start a business will help you stay focused on your goals and get started faster.

1. Write A Property Development Business Plan - The first step in starting a business is to create a detailed real estate development company business plan that outlines all aspects of the venture. This should include market research on the real estate market and potential target market size, information the services you will offer, marketing strategies, pricing details and a solid financial plan.  

2. Choose Your Legal Structure - It's important to select an appropriate legal entity for your property development business. This could be a limited liability company (LLC), corporation, partnership, or sole proprietorship. Each type has its own benefits and drawbacks so it’s important to do research and choose wisely so that your property development business is in compliance with local laws.

3. Register Your Property Development Business - Once you have chosen a legal structure, the next step is to register your property development business with the government or state where you’re operating from. This includes obtaining licenses and permits as required by federal, state, and local laws. 

4. Identify Financing Options - It’s likely that you’ll need some capital to start your property development business, so take some time to identify what financing options are available such as bank loans, investor funding, grants, or crowdfunding platforms. 

5. Choose a Location - Whether you plan on operating out of a physical location or not, you should always have an idea of where you’ll be based should it become necessary in the future as well as what kind of space would be suitable for your operations. 

6. Hire Employees - There are several ways to find qualified employees including job boards like LinkedIn or Indeed as well as hiring agencies if needed – depending on what type of employees you need it might also be more effective to reach out directly through networking events. 

7. Acquire Necessary Property Development Equipment & Supplies - In order to start your property development business, you'll need to purchase all of the necessary equipment and supplies to run a successful operation. 

8. Market & Promote Your Business - Once you have all the necessary pieces in place, it’s time to start promoting and marketing your property development business. This includes creating a website, utilizing social media platforms like Facebook or Twitter, and having an effective Search Engine Optimization (SEO) strategy. You should also consider traditional marketing techniques such as radio or print advertising.

STARTING A NEW PROPERTY DEVELOPMENT? THESE ARE THE DOCUMENTS YOU NEED

While it isn’t possible to list all the documents required for new developments because each one has its own unique set of requirements based on vast variables, we hope this list assists developers with regards to anticipated requirements within ‘standard’ developments.

Wherever possible, different scenarios were pre-empted in order to widen the variety of documents that may be needed. However, as stated, as conveyancers we cannot guarantee that this list will provide you with all the answers, and a development will have to be assessed on its own merits.

As conveyancers, we will not be held liable for any damages, should this list not suffice for a particular development. Also note that this list only mentions the documents required from the developer and it’s not a comprehensive list of ALL the documentation needed in the process.

Documents necessary for Township Opening – before 1 July 2016

1. Final Conditions of Establishment   (COE) 2. Approved General Plan   (if General Plan is older than 1 year then a letter of extension of time from local authority) 3. Section 101 certificate  4. Original Title Deed   of the property 5. Resolution authorising the person signing all the documentation on behalf of the developer, if the developer is a company, or other juristic person

Documents necessary for Township Opening – after 1 July 2016 and By-Laws were published

1. Final Conditions of Establishment   (COE) 2. Approved General Plan   (if General Plan is older than 1 year then a letter of extension of time from local authority) 3. If the local authority under which the township falls has published by-laws relating to the SPLUMA Act, the new requirement in terms of those by-laws will have to be fulfilled. The relevant by-laws will have to be perused in order to establish the requirements that need to be fulfilled. A certificate (similar to the ‘old’ Section 101 certificate ) will have to be obtained 4. Any other documents required in terms of the by-laws of the presiding local authority 5. Original Title Deed    of the property 6. Resolution authorising the person signing all the documentation on behalf of the developer, if the developer is a company, or other juristic person.

First actions after Township Opening and proclamation – before 1 July 2016

1. Section 82 certificate 2. Original Title Deed   of property where township was established 3. Any other documents relating to the conditions to be fulfilled in terms of the COE, for example:

• LG diagrams  for consolidations, subdivisions, servitudes • Original signed consents by the local authority to affect the registration of the consolidations and subdivisions, if and where the consolidations and subdivisions do not form part of the COE • Original signed servitude agreements • Documents to be signed by the local authority, for instance Notarial Tie Agreements

First actions after Township Opening and proclamation – after 1 July 2016 and By-Laws were published

1. A certificate stating that the services have been finalised (similar to the ‘old’ Section 82 certificate ) 2. Original Title Deed   of property where township was established 3. Any other documents relating to the conditions to be fulfilled in terms of the COE, for example:

• LG diagrams for consolidations, subdivisions and servitudes • Original signed consents by the local authority to affect the registration of the consolidations and subdivisions  if  and where the consolidations and subdivisions do not form part of the COE • Original signed servitude agreements • Documents to be signed by the local authority, for instance Notarial Tie Agreements

4. Any other document required in terms of the by-laws of the presiding local authority

Registration of Sectional Title Scheme

1. Approved Sectional Title Plans 2. SPLUMA and By-Law certificates  relating to the approval of the opening of the scheme – necessary for lodgement at the deeds office 3. Section 82 certificate 4. If right of extension of scheme is registered:

• Amended Sectional Title Plans • Site Development Plan • Certificate from Land Surveyor  in terms of Section 25(2) • Certificate from Architect  in terms of Section 25(2)(a) and (b) / OR approved building plans  of the different types of Units

5. Amended Management and Conduct Rules  of the Scheme OR proof from the managing agent that same was lodged at the ombudsman 6. Parking layout plans  and Parking allocation  if parking is reserved in terms of Section 27 (A) of the Sectional Title Act 7. Any other document required in terms of the SPLUMA Act

Documents required for the registration of the transfer of a Unit / Erf

1. Clearance certificate  from the local authority (rates and taxes) 2. Acceptance of purchaser   relating to any restrictive condition (HOA / electricity restrictions by the local authority, etc)

Documents required by the bank in order to register bonds

It is important to note that documents required by the bank will be scrutinized for the correct information. Therefore, should the property description be reflected on a document, it should be CORRECT in every aspect, for example: The correct erf number, extension number, etc. Property descriptions as indicated on the approved Sectional Title Plans / General Plans should be followed precisely.

To be obtained from the client:

1. Copy of valid identity document 2. Proof of address  – not older than three months 3. Confirmation of marital status ( marriage certificate   and ante-nuptial contracts   if applicable) 4. Income tax reference number 5. Life cover – if a requirement on bond instruction 6. Happy Letter  – to be signed by the client after inspection of the property – MUST BE ON BANK’S REQUIRED FORM

To be obtained from the managing agent / insurer / body corporate / HOA / bond originator:

1. Sectional Title insurance certificate   2. Clearance certificate  relating to levies paid to the body corporate 3. Proposed levy statement  (body corporate / HOA) 4. Proposed budget (body corporate / HOA) 5. Rules of the body corporate 6. Pre-val  approved by the different banks

To be obtained from the developer:

1. Certified copy of the NHBRC registration certificate 2. Original NHBRC enrolment certificate   for every unit (indicating the correct property description and the correct selling price) 3. Plumbing certificates 4. Engineering certificate s relating to:

• Structure • Roof • Slabs • Staircases

5. Electrical compliance certicates 6. Builders All Risk Policy 7. Gas certicates 8. Certificates relating to infestations and pests 9. Occupation certificates 10. Borehole certificates 11. ABSA Bank (for DoComply purposes):

• Company registration documents  for the developer • Income tax number of the developer • VAT registration number  of the developer • Resolution from the developer to indicate who the authorised signatory is

12. Certificates relating to invasive specie s (permits to be obtained for certain plants, animals, etc) 13. Certificates relating to restrictive conditions  (for instance letter from electrical engineer stating the minimum electricity supply to the property)

Please contact Bert Smith and his experienced team should you have any questions in this regard. We look forward to assisting you

•  Share
•  Tweet
•  +1
•  Pin it

Risk of exposure under the Consumer Protection Act 68 of 2008

Section 2 Part H of the CPA deals with the consumer’s fundamental right to fair…

Who Gets the House?

The romantic proposal, the wedding invites, the roses, the candles, the church…the divorce. Not all…

Bert Smith Incorporated 20th Anniversary

Three weeks before my grandmother passing I was sitting on the bed with her when…

How can a Usufruct save tax when transferring a property to a Trust?

Transferring your property to a Trust? A Usufruct could solve the headache of Transfer Duty…

SPLUMA and Contractual Capacity in New Developments

By Nadine Lombard Section 31 Contracts and Options – Housing Estates, Sectional Title Developments, Township…

SPLUMA: Where Does It Apply?

By Nadine Lombard The regulations for land use rights according to SPLUMA, The Spatial Planning…

Botswana Desert Rewarded SACCS Moto Winners

The Toyota Kalahari Botswana 1000 Desert Race (TDR 1000) in Botswana is a gruelling and…

Real Net Sponsors Bert Smith All Stars 2017

Bert Smith All Stars Off Road Racing team is proud to have Real Net as…

2016 Bert Smith Incorporated

Property developments and buying off-plan: What you need to know

• All Real Estate Law News

Real Estate Law

Property developments in South Africa are growing, and buying off-plan from these developments is becoming a popular choice. This helps developers to finance the project, as having pre-approved sales allows them to obtain the necessary funding for the construction, and this form of purchasing can also save the purchaser money as transfer duty is not applicable.

At a glance

• Property developments in South Africa are experiencing growth, and buying off-plan is a popular choice that benefits both developers and purchasers.
• Buying off-plan involves purchasing a property before it is built, with the responsibility for completion resting with the developer. Draft plans are provided, and deviations may occur with the purchaser's approval.
• Risks associated with buying off-plan can be mitigated by researching the developer's reputation, inspecting the property for defects, and relying on the National Home Builders Registration Council (NHBRC) for protection and warranty coverage. Recourse for defects may involve legal action by the body corporate or seeking relief from the NHBRC.

“ Buying off-plan ” is essentially purchasing a unit within a sectional title or erf within a home cluster scheme prior to it being erected and built. The responsibility then lies with the developer and builder to complete the building to your satisfaction and on time. When buying off-plan, the developer will provide you with draft plans of what the property will possibly look like. As the draft plans are not final, there may be a need for the builder and developers to deviate from the draft plans, but they will always need to seek the purchaser’s approval should the deviations impact them.

As with anything in life, there are some risks to be aware of when deciding to buy off-plan, but these risks decrease as construction nears completion. Therefore, the purchase price of units will usually be lower at the beginning of construction and then increase towards the end of construction.

Risks of buying off-plan

The rule of thumb is: do your background work before committing to buying off-plan. Ensure that the developer is reputable. Speak to various estate agents and ask whether you can obtain confirmation from them as to other developments completed by the developer and possibly do internet searches on the developer to try and ascertain whether other developments done by them were successful. Once you have established that the developer is reputable, even if there are some defects within the building, you can rely on them to fix the problems. A dependable developer will ask the purchaser to inspect the building’s finishes and fixtures within the first few specified days of occupation and then to provide the developer with a list of defects so that they may be fixed. Some of the things to have a look at as possible defects are:

• All taps and showers are in working order
• Cupboards open well and are installed correctly
• Tiles are laid straight
• Plugs and electrical work are in working order
• The stove is in working order
• There are no scratches, cracks or marks on the walls
• The walls are straight
• The roof and patios are sealed

The National Housing Consumers Protection Measures Act 95 of 1998 was enacted in 1998, and under this legislation the National Home Builders Registration Council (NHBRC) was established. Its mandate is to protect the interests of purchasers by ensuring that builders comply with the prescribed building industry standards. It thus protects purchasers from unscrupulous builders who deliver sub-standard houses, bad workmanship and the use of poor quality material. The NHBRC holds all builders who register with them accountable and holds them to a wide range of requirements before they can commence building. One of these requirements is that a Certificate of Enrolment needs to be obtained before the foundations of the development are laid. To fulfil this requirement, each builder must provide the approved building plans of the development as well as a specification schedule of the actual construction to be done and the building materials the contractor intends to use. The approved plans, together with the developer’s building contract must be supplied to purchasers before the construction commences.

The NHBRC further inspects all enrolled homes at key stages of construction to insure against poor workmanship and to allow them to issue a non-compliance to the builder should that be the case. The NHBRC also provides purchasers with warranty cover for any minor defects which are identified within the first three months of occupation, roof leaks identified within the first year of occupation and cover against major structural defects within the first five years of occupation. Should the builder be unable or unwilling to rectify the defects, the NHBRC can rectify them, following the completion of a complaint procedure by the purchaser.

Recourse for defects

The reality though is that most defects and signs of deterioration only make themselves apparent within a couple of years after the buildings have been constructed. What happens then?

The Sectional Titles Act 95 of 1986 (STA) provides that a body corporate may institute legal action against a developer by way of a special resolution with the support of at least 75% of all owners in the scheme. The body corporate then needs proof that the workmanship was poor and that sub-standard materials were used in the construction process. This route is a costly one as litigation is not cheap. The glaring truth is also that the STA places responsibility on the body corporate to maintain and repair any exterior damages to the buildings within the scheme by means of having the owners of each unit pay their respective levies, and the owners of the units are then left to repair any internal damages to their specific unit. 

Another pitfall is having the developer promise to complete the construction within a specified time period only to have that time pass without the purchaser being able to take occupation of their unit and construction still being far from completed. Here again, a purchaser’s recourse would be to approach the NHBRC for relief and appropriate action to be sanctioned against the builder. The specification schedule mentioned earlier should also be constantly monitored and updated to ascertain timeously whether there will be any delays and for these to be communicated to all parties involved.

Benefits of buying off-plan

However, there are also many positive sides to buying off-plan besides saving on the transfer duty payments, including that only a small amount of cash needs to be paid upfront (usually between 10 to 15% of the purchase price) to reserve the unit. The payment of the balance of the purchase price (if paying cash) will only be due on completion and it is also possible to finance the purchase through a loan with a bank. Although no transfer duty is paid to the South African Revenue Service (SARS) with these types of sales, it does not mean that SARS does not “ get a slice ” – rather the developer pays value-added tax on the transaction as they are considered to be selling “ goods ” as part of the stock in their business.

Units bought off-plan usually appreciate in value by the time transfer is effected, which is an attractive feature for investors and first-time buyers. Often, purchasers are given the freedom (with a few restrictions) to choose their own internal fittings and finishes for their units, but such options are developer specific and purchasers would need to enquire with the developer if such options are available.

Although buying off-plan is not for the faint hearted, once you have ascertained that you are working with a reliable team of builders and developers, it can bring you excellent results.

The information and material published on this website is provided for general purposes only and does not constitute legal advice. We make every effort to ensure that the content is updated regularly and to offer the most current and accurate information. Please consult one of our lawyers on any specific legal problem or matter. We accept no responsibility for any loss or damage, whether direct or consequential, which may arise from reliance on the information contained in these pages. Please refer to our full terms and conditions . Copyright © 2024 Cliffe Dekker Hofmeyr. All rights reserved. For permission to reproduce an article or publication, please contact us [email protected] .

We support our clients’ strategic and operational needs by offering innovative, integrated and high quality thought leadership. To stay up to date on the latest legal developments that may potentially impact your business, subscribe to our alerts, seminar and webinar invitations.

You might also be interested in

31 Jan 2024

by Alex Kanyi and Billy Oloo

Tax stability and predictability for economic sustainability

Prior to deciding to introduce or redomicile a business in any country, an investor must always consider how favourable, stable, and predictable the country’s tax system is. The primary rationale for this is the need for certainty and guarantee regarding the future sustainability of investment in the host country. This predictability ensures that the investor can plan for their business, which includes planning ahead for tax liabilities and allocating resources appropriately and efficiently. On the other hand, a tax regime that is unstable and unpredictable has the opposite effect, that is, it hinders an investor’s power to consciously make investment decisions, which would ultimately be a deterrent, leading to capital flight and reduced economic activity. Foreign direct investment (FDI) is particularly sensitive to tax stability and predictability, as investors weigh the risks associated with potential changes in tax laws. Countries with consistent and transparent tax regimes are more likely to attract FDI, contributing to economic development and job creation. 

Corporate & Commercial Law

by Vivien Chaplin and Haafizah Khota

Paycheck Politics: Decoding the Companies Amendment Bill and its impact on executive remuneration

In recent years, there has been a significant global focus on the remuneration of senior executives within companies. This heightened attention is especially pertinent in South Africa, a nation that has consistently ranked among the countries with the highest levels of income inequality in the world. 

27 Feb 2024

by Mike Collins

Mixed-use developments: The pros and cons

Mixed-use sectional schemes in South Africa have gained popularity for their potential to offer diverse and integrated living and working spaces. However, like any concept, they come with both advantages anddisadvantages. 

14 May 2024

by Alex Kanyi, Lena Onyango, Nicholas Gathecha, Mike Ogutu and Judith Jepkorir

Highlights of the Finance Bill, 2024

In the recent past, Kenya's economy has seen slow and steady growth, with the International Monetary Fund's review projecting a growth of about 5,5% in 2024. However, global shocks such as the geopolitical tensions in Europe and the Middle East, coupled with domestic challenges such as high public debt, have made it a challenge for the country to meet its financial target, which stands at KES 3,435 billion for the 2024/25 financial year.

Tax & Exchange Control

72 min read

30 Nov 2023

by Nicholas Carroll and Jerome Brink

Tax Vertical mergers are back

Section 44 of the Income Tax Act 58 of 1962 (Tax Act) is one of the lesser used of the so-called “ corporate rollover relief rules ”, but is nevertheless one of the more hotly contested. Broadly, it provides for rollover relief from tax where two companies amalgamate to form one company, the other being liquidated.

27 Mar 2024

by Dean Tennant, Jesse De Jager and Megan Rodgers

The unpacking of a Strategic Integrated Project

Speaking at the third Sustainable Infrastructure Development Symposium in Cape Town on 19 March 2024, President Cyril Ramaphosa stated that investment in infrastructure is central to the achievement of South Africa’s development goals. President Ramaphosa highlighted some initiatives which seek to address this, including the amendment of the Division of Revenue Act 5 of 2023 to enable provincial governments to use their infrastructure grants and budget allocations to crowd-in private sector finance for large social infrastructure programmes, as well as amendments to the public-private partnership regulations. Of specific importance to South Africa’s development goals is the implementation of Strategic Integrated Projects (SIPs) which aims to minimise the red tape associated with projects that are of social or economic importance to SouthAfrica. 

This website uses cookies to enhance the browsing experience. For more information, please see our Cookie Policy.