Alright, so you’ve been binge-watching those property programmes on telly, seeing massive glass towers going up in town, and thinking “reckon I could do that.” Or maybe you’ve got a mate who’s made a killing developing some units, and now you’re wondering if you’ve been missing out.
Here’s the thing – yeah, commercial property development can make you absolutely loaded. But it can also wipe you out faster than you can say “planning permission denied.”
I’ve spent years around this industry. Watched blokes turn £100k into millions. Also seen people lose their houses, marriages, and sanity chasing deals that looked brilliant on paper. What separates them? Usually,y it’s not genius – it’s just knowing what the hell you’re actually doing and not making stupid decisions with other people’s money.
So let’s talk about what this job really is, how you actually break in (not the fantasy version), and whether you’ve got what it takes.
What Does a Commercial Developer Actually Do All Day?
First up, bin everything you’ve seen on telly.
You’re not rocking up to sites in a nice motor, pointing at things while everyone else does the graft. Well, maybe in ten yearss if you’re lucky, but definitely not when you start.
Here’s what the job actually looks like:
You find buildings or land that’s underused → You somehow convince people to lend you money → You manage builders who are trying to rip you off → You find someone to rent or buy it → Cross your fing,ers you’ve made a profit
Every one of those steps takes forever, costs more than you thought, and involves dealing with people who’d rather you just went away.
What kind of stuff gets developed:
- Offices (think business parks, city centre blocks)
- Shops and retail (high street units, shopping centres)
- Warehouses (massive sheds for Amazon and the like)
- Mixed-use (flats on top, shops below, offices in between)
- Care homes (big money if you get it right)
- Student blocks (those ugly towers near every uni)
- Hotels (from Travelodge to boutique)
You’ll end up focusing on one type. Nobody’s brilliant at all of them, despite what they tell you down the pub.
The Bit Nobody Wants to Hear: How You Actually Start
Right, truth bomb time:
You either need a shedload of, orh, OR you need to work for someone who does for about five to ten years first. There’s no magic shortcut.
Two realistic ways in:
Route One: Graft Your Way Up (Boring But Works)
Get a job in something related first:
- Commercial estate agent (not selling houses – proper commercial)
- Site management or project management
- Surveying
- Planning consultant
- Finance side of property
- Architecture
How long? Realisti,cally 5-10 years before you do your own deal
Sounds ages, doesn’t it? But you’re learning how not to cock it up, meeting people who’ll actually lend you money later, and hopefully saving a deposit.
There’s a developer I know who started flogging commercial properties in Birmingham. Seven years of that – learning which businesses wanted what, getting to know landlords, understanding the market. The first development he did was an old factory turned into office space. Nothing flash, made about 80 grand, but that was his launchpad.
Route Two: You’ve Already Got Money (Risky As Hell)
If you can lay your hands on half a million quid and you’re willing to potentially lose the lot, you can dive straight in.
But here’s why most people who do this get absolutely battered:
Having money doesn’t mean you know:
- How planning actually works (it’s mental)
- How to negotiate with council planners who don’t want your development
- Which contractors are solid and which will fleece you
- What the actual hell do construction contracts mean
- Whether anyone actually wants to rent what you’re building
- How to make numbers work that aren’t complete fantasy
Chucking money at something you don’t understand just means you lose money faster.
What You Actually Need To Be Good At
Let’s talk about the skills that separate people who make it from people who don’t:
You Need To Understand Money (Properly)
Can you read a balance sheet? Model cashflow? Spot when someone’s numbers are complete bollocks? If not, you’re going to get taken to the cleaners.
This isn’t optional. If you can’t build a financial model in Excel, learn it. This weekend. Seriously.
You Need To Negotiate Everything
And I mean everything:
- What you pay for land
- What contractors charge you
- What the council wants from you
- What tenants will pay
- What interest rates will you accept
- What you pay for bricks
If you just accept whatever someone first offers, you’re in the wrong game.
You Need Skin Like a Rhino
Stuff that will happen to you:
- Banks telling you to sling your hook
- Planning officers are refusing your application
- Your main contractor is going bust halfway through
- Tenants pulling out at the last second
- The property market is tanking
- Neighbours campaigning against your project
I know a lad who developed a small retail thing in Leeds. Residents kicked off, planning got delayed fourteen months, costs went through the roof, nearly bankrupted him. But he stuck it out, got it done, filled it with tenants in eight months, and walked away with two hundred grand. Those fourteen months, though? Nearly destroyed him.
You’re Running Everything At Once
On any given wee,k you’re dealing with:
- Architects who are running late
- Engineers who’ve found a problem
- Planning consultantare s charging you more
- Solicitors being solicitors
- Builders doing stuff wrong
- Subcontractors not showing up
- Building inspectors are finding issues
- Utility companies are taking forever
- Letting agents are useless
If you’re the type who can only focus on one thing at a time, this will break you.
You Need To Know What People Actually Want
Not what you reckon they want. What they’ll actually pay money for.
Quick example:
Back in 2019, developers were churning out traditional offices. Then COVID smacked everyone in the face. Now businesses want completely different stuff:
- Way less space (everyone’s hybrid working)
- Flexible layouts
- Proper ventilation (not recycled air)
- Bike racks everywhere
- Electric car charging
The developers who saw that coming made bank. The ones still building 2019-style offices? Struggling to let them.
Your First Project: Don’t Be a Muppet
Forget building a skyscraper.
Your first job needs to be small enough that if it goes tits up, you’re not homeless.
What Actually Makes Sense For Beginners:
Converting stuff that already exists:
- An empty shop turned into offices
- Old pub split into commercial units
- Warehouse converted to workspace
Why conversions beat new builds for starters:
- Less chance of planning nightmares
- Quicker to finish
- Costs less overall
- Easier to work out what you’re spending
Tiny new builds:
- One commercial unit
- Extending something that exists
- Splitting up bigger premises
Budget for your first go: £100k to £500k all in
That’s buying the place, doing the work, paying all the professionals, having a buffer for when stuff goes wrong, and covering costs while you’re finding tenants.
Actual Example From Real Life:
What happened:
Bought a knackered shop in Nottingham for 75 grand. Needed 45 grand of work to make it into two retail units.
What it costs:
- Buying it: £75,000
- Doing it up: £45,000
- Architects, solicitors, etc: £8,000
- Holding costs for six months: £5,000
- Total outlay: £133,000
How it turned out:
Rented both units at twelve grand each per year (24k total coming in). Property now worth 240 grand. Refinanced it to pull the original cash out, kept it earning 24k a year.
Not sexy. But it bloody worked.
Where Does The Money Come From? (The Honest Version)
You’ve got a few options, and you’ll probably mix them:
Your Own Cash
Usually,y you need to stump up 25-40% of what the whole thing costs.
So for a £200,000 job:
- You put in: £50k-£80k
- You borrow: £120k-£150k
Development Finance (Special Property Loans)
These aren’t like normal mortgages. Specialist lenders who deal with developments.
What they usually want:
- Interest: 6-12% a year
- Fees upfront: 2-3% of what you’re borrowing
- They’ll lend 60-75% of the value
- Sometimes 100% of building costs (but you still buy the land)
The problem:
First-timers get told to do one unless you’ve got experienced people working with you.
Joint Ventures (Someone Else’s Money)
They put the cash in, you do all the work. Split the profit (often 50/,50 but you can negotiate anything).
This is how loads of people get started.
Find someone with money who fancies property returns but can’t be arsed with the hassle.
Rich People Looking For Returns
They want 15-25% annual return,rns usually.
How it works:
Someone puts in £150,000. You promise them 20% per yeThe projectject takes 18 months. They get their £150k back plus £45k profit. You keep whatever’s left over.
Bridging Loans (Expensive Short-Term Cash)
Short-term stuff (3-18 months) that costs a fortune.
When you’d use it:
- Buying at auction (need cash fast)
- Opportunity where speed matters
- Temporary money while you sort out proper finance
What it costs: 0.5-1.5% MONTHLY (yeah, monthly)
Only touch these if you’re dead certain you can pay them back quickly.
How A Development Actually Happens (Step By Step)
1. Find Something Worth Doing
Where to look:
- Auction catalogues
- Commercial agents (best deals never hit the market)
- Driving aroun,d looking at neglected buildings
- Talking to other developers
- Council lists of stuff they’re selling
What you’re after:
- Places going cheap
- Buildings you could change the use of
- Sites where you might get planning
- Owners who need to sellquicklyk
2. Check It’s Not A Disaster Waiting To Happen
Before you offer anything, find out:
- What’s the planning history? (council website)
- Is the ground contaminated?
- Is the building actually sound?
- Can you get utilities connected?
- Is access acceptable?
- Any weird restrictions on what you can do?
- What are similar places actually renting for?
This costs you two to five grand but stops you from buying a nightmare.
3. Do The Deal
Don’t pay what they’re asking.
Everything’s up for grabs with commercial property.
Get these clauses in:
- “Subject to planning” (you can walk if planning says no)
- “Subject to finance” (you can walk if you can’t get funding)
- Long timescales (6-12 months to get everything sorted)
4. Planning (Where Dreams Die)
This is where beginners get absolutely mullered.
You need:
- Proper architectural drawings
- Planning statement explaining what you’re doing
- Design and access statement
- Supporting reports (parking, drainage, bats, whatever)
Costs: £5k-£20k, dependingon how complicated it is
Timeline: 8-13 weeks officially (often longer)
Pro tip:
Pay £200-500 for a pre-app meeting with planning officers. Best money you’ll ever spend. Can save you months.
5. Sort The Finance
Once planning’s in (or you’re confident it’s coming), nail down your money.
Lenders want:
- Proper business plan
- Financial projections that aren’t fantasy
- Planning approval
- Valuations
- Proof you know what you’re doing
- How you’re getting out (selling or refinancing)
6. Building Phase (Welcome To Hell)
This is where you earn your money.
What you’re doing:
- On-site every week, minimum
- Making sure money’s there when needed
- Sorting out the constant problems
- Checking quality
- Keeping everything on schedule
Pay for a good quantity surveyor. They cost mone,y but they’ll save you more by stopping contractorfrom s taking the piss.
7. Getting Tenants Or Selling
Start marketing before you’re finished building.
Your options:
- Rent it out (steady income)
- Sell it (quick profit)
- Refinance and keep it (pull money out, keep the income)
| What You Do | How Quick | Profit Level | Ongoing Money | Risk Level |
|---|---|---|---|---|
| Sell it straight away | Fast (1-3 months) | Medium-High | Nothing | Low |
| Let the tenants | Medium (3-6 months) | Lower (but keeps coming) | High | Medium |
| Refinance & keep | Slow (6+ months) | Lower upfront | High | Higher |
Mistakes That Kill Developers Dead
1. Thinking Your Budget’s Right
Your budget is wrong. Always.
Add 20% for contingency. Then add another 10% for all the stuff you forgot existed.
Things beginners don’t budget for:
- All the professional fees
- Interest while you’re building
- Connecting utilities (can be ten grand easy)
- What the council demands from you
- Marketing and agent fees
- Costs while it’s empty
2. Thinking You’ll Get Top Rent
Just because someone nearby gets £25k doesn’t mean you will.
Always assume less than you hope.
3. Going With The Cheapest Builder
Cheapest quote? There’s a reason it’s cheap, and it’s not because they’re nice.
Finding decent contractors:
- Ask people you trust
- Look at their previous jobs
- Get at least three quotes
- Use proper contracts
- Never pay everything up front
4. Ignoring Planning Rules
You can’t just build whatever you fancy.
Planning controls:
- How tall can it be
- What materials do you use
- How much parking do you need
- Environmental stuff
- Whether you’re blocking someone’s light
Assume nothing. Check absolutely everything.
5. Running Out Of Cash Halfway Through
This is game over.
Once you stop, builders disappear, materials go off, squatters move in, and costs go mental.
Always have more money available than you think you’ll need.
What You’ll Actually Earn (No Bullshit)
Years 1-3 (Learning The Ropes)
Working for someone: £25k-£45k
Doing your own thing: £0-£50k (all over the place, probably closer to zero)
Years 4-7 (First Proper Projects)
£40k-£100k per year if you’re doing alright
Maybe 1-2 small projects a year, making £20k-£50k on each.
Years 8-15 (You’re Established Now)
£100k-£500k per year
Multiple projects on the go, bigger developments, and banks actually return your calls.
15 Years+ (You’ve Made It)
£500k-£5m+ per year
Proper projects, your own portfolio, maybe keeping stuff rather than always selling.
But remember – for every developer on half a million, there’s ten who tried and went broke.
Is This Actually For You?
Time for some honesty:
You’ll probably do alright if:
✓ Risk doesn’t keep you up at night
✓ Not knowing what’s happening doesn’t stress you out
✓ Numbers make sense to you
✓ You can argue your corner
✓ You’re patient (this takes years)
✓ You learn from getting stuff wrong
✓ You’ve got other income for the first few years
You’ll probably struggle if:
✗ You need to know what’s coming in each month
✗ Uncertainty makes you anxious
✗ You hate confrontation
✗ You want results next week
✗ Details bore you
✗ Losing money would destroy you
Getting Started This Year (If You’re Serious)
First 3 Months:
- Read stuff (try “The Real Estate Game”)
- Do some courses (RICS do commercial property ones)
- Follow a developer around (work for free if you have to)
- Join property networks
Months 4-6:
- Look at 50 commercial properties (what would you do with each?)
- Go to auctions (don’t bid, just watch)
- Talk to commercial agents
- Study planning applications in your area
Months 7-12:
- Pick your niche (what type of property?)
- Get your team together (architect, surveyor, solicitor)
- Get some money sorted (save it, find partners, arrange loans)
- Find your first small opportunity
Year 2:
Actually do something. Small, low-risk, somewhere you understand.
Don’t try to hit a home run the first time up.
The Bottom Line
Commercial property development isn’t a quick way to get rich. It’s a proper business that needs money, knowledge, and serious bottle.
What’s good about it:
- Can make you seriously wealthy
- You’re building actual stuff
- You’re your own boss eventually
- Multiple ways to make money
What’s crap about it:
- You could lose everything
- It’s stressful as hell
- Nothing happens quickly
- Everyone’s trying to shaft you
- Markets can turn on you overnight
My actual advice?
Start tiny. Learn properly. Don’t gamble money you can’t lose. Get experience before you try anything ambitious.
The developers who make it are the ones who survive their mistakes. The ones who go bust are the ones who bet everything on their first go and get it wrong.
Which one are you going to be?
Anyone out there doing development or thinking about it? What’s stopping you, or what pushed you to start? Comments below – hearing from people who’ve actually done it beats any guide.