Encouraging downstream processing: industrial policy or resource nationalism?

Why is it crucial to consider downstream processing at this time? There has long been a discussion in economic policy circles about downstream processing, most notably in the context of central planning or mercantilism, as evidenced by the former Soviet Union. With the fall of the Soviet Union, the demise of central planning, and the dismal outcomes of industrial policy as it was implemented in both developed and developing nations during the 1970s and 1980s, it would have been simple to assume that this conversation had come to an end. It seemed reasonable to assume that recent history would have provided enough empirical proof to reassure even the most doubtful. Over the last three decades, global trade has expanded at an unprecedented rate, leading to a significant decline in poverty. This can be attributed, at least in part, to specialization and the dispersion of supply chains. Notably, global trade has outpaced global GDP growth, refuting the claims made by proponents of policies

Advice for aspiring real estate developers

Create a business plan for property development.

It makes no difference if you want to augment your principal income with part-time employment. Alternatively, you must have a clearly defined business plan if you are working on property development full-time. For further details, kindly review our template for a business plan on property development.Think about the materials you will require as well. Will you need a marketing agency or employees? Will you require any other tools, such as a website, to market your property? Take into account all additional expenses that are not related to the construction of the property.

Always consider your return on investment and the amount you will receive from the rental.

The monthly rental return is an important consideration, contingent on whether you intend to employ a Buy to Let approach. If you intend to sell, though, you need to be ready for what the market will provide you when the time comes. Thus, as you estimate the completion date of your project, find out if the market is expected to rise or fall.By estimating the annual rental income for the property value, the rental amount can be computed. 10% is regarded as a decent income level. However, if you decide to turn the property into an MDU (multi-dwelling property), you might significantly raise the price. Aiming for a return on capital of about 30% is a reasonable goal if you intend to sell.

Make sure you have the necessary funding in place for property development.

It takes money to get started as a property developer. Until you sell the home or rent it out, your money will be locked up in your investments. Ascertain that you have adequate funds to operate with until your development is finished.Making ensuring you can raise the required funds is crucial. For this, there are various choices available, including bridging loans. Another option is to pledge your present house as security. Speak with a committed property finance specialist who can provide you with guidance on appropriate and accessible lending solutions.

Since short-term financing is backed by real estate, bridging loans are an excellent choice. Here is an explanation of bridging loans in further detail.To further reduce the risks associated with costly property development, consider forming a joint venture with a partner. In order to form a commercial partnership, both sides must consent to pool their resources and assume some risk.

Take your time and do thorough research.

It's imperative that you take your time when developing real estate. Opportunities can easily ensnare us, so always keep in mind that if something seems too good to be true, it generally is. Spend some time learning about the local real estate market and where the greatest places are to make the kind of investment you want to make. Not every property will work well with your development style. Decide what is most effective for you first, and resist the urge to let anyone tell you that you are passing on a once-in-a-lifetime chance. When making your initial investment, you can always start modest and work your way up to a larger investment as soon as possible.

In order to determine the appropriate market asking price, market research is crucial. It's critical to receive a decent value on the quantity you buy and sell, just like with any financial venture. When it comes to property development, buying at a fair price yields a higher profit than selling at the asking price. Thus, be sure that you have effectively bargained the asking price. You can compare prices and find out what the right market asking price is with the aid of some fantastic websites like Rightmove and Zoopla. Try your best to find out why a property is priced so much less if it is. Is the price being influenced by any other factors, like structural problems or a dubious area?

Consider the location.

A property developer may have a predetermined preference for the location of their purchases, therefore this may go unnoticed. Recall that location, location, location is crucial. It is crucial that you look for a growing industry where you can make the most money, not just one you are familiar with.

Develop your land with a specific goal in mind.

Make sure the item is suitable for its intended use whether you're purchasing it to sell or rent. Verify that the property is in good condition and that you have complied with all safety and security rules. Among the most important factors are security and safety, and you must ensure that the property is appropriate for its intended use, including:

CCTV and intruder alarm systems are examples of home security systems. Ensure that every window and door on the property has a lock that fits properly. In case of an emergency, you can have a system that will connect to your mobile phone if you intend to rent. As an alternative, you might hire an alarm firm; further choices include installing a fire alarm system, which might be required by law. The fact that a security system will lower your insurance rates is an additional benefit. Boilers for homes are also essential for things like central heating, hot water for showers and bathtubs, and cooking. Make sure the pipelines are in good shape if you are building. Replacing it later on when the renovation is finished can be expensive.

Will you purchase to rent or to sell?

Verify the HMRC guidelines as selling a property may result in capital gains tax. It is currently subject to an annual exemption of £12,000 as of 2019–2020 and ranges from 18% to 28%, depending on income.In accordance with your business plan, a reputable property developer always has a planned exit strategy.In the near run, buying and selling can be a better alternative. However, you may be more reliant on the state of the market, so be sure you may enter and exit at the costs you wish to attain.An option for a longer duration is to buy to let. You have the option to increase your portfolio of properties even further if you would like to use it as a pension in the future or to replace your current pay. But keep in mind that a rental property is taxable as income since it is treated like a salary.


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