But surely, there must be some things that are beyond the pale when juggling a second income-generating business alongside your day job. Jobs that most people would assume are more hassle than hustle. Or jobs where the time constraints, lack of skills, or sheer volume of effort make it impossible. And I suspect most people would think that property development would fit fairly and squarely into at least one of those categories.
But what exactly do we mean when we say property development? After all, it’s a broad spectrum, with building a home extension at one end right through to building a housing estate on the other. Well, we can probably rule both of these out as a side hustle. A home extension may add value, but it doesn’t pull in any cash unless you sell your house afterwards, which seems a little draconian as side hustles go. And it’s probably fair to assume that starting the next Barratt Homes or Persimmon isn’t going to be something you’ll squeeze in while working your nine-to-five. But a couple of types of property development sit between the two on our development spectrum, and they look a lot more promising.
The first is to do a flip (a.k.a, a refurb or doer-upper) – take a tired residential house, do it up, and then sell it at a profit. According to Hamptons, the average flip generated £48k in profit during the pandemic. For many, this will sound less like a side hustle and more like a case for telling their boss to start recruiting their replacement. But before you start drafting your resignation letter, you should bear a few points in mind. Firstly, if you’re going to buy a property to do up, you’ll need to be flush enough to fund both a mortgage deposit (usually 25% of the purchase price) and the cost of your renovations. You’ll also be tested for affordability by the mortgage company, plus you’ll need make repayments while you refurbish it. Secondly, house prices rose significantly during the pandemic, so a significant part of that £48k profit uplift was due to the market rising during the period of ownership. Since the market is predicted to fall in 2023, average profits will likely be significantly dented. Of course, you can cut down on the cost of renovations by doing some of the work yourself, and it’s entirely possible to do this during evenings and weekends, albeit it can become a little all-consuming and means your project may take a little longer.