Once you have established the ground rules for your property business plan, you should learn all you can about finance so you fully understand how much you can borrow and how to manage the associated costs.

There are various ways you can fund your property development project and you must be absolutely clear of the pros and cons of each before you make a decision.

Most developers will use a combination of the different methods but you must decide what is right for you.

If you have enough cash to buy your property outright AND fund the development, this might appear the simplest route. There is certainly a lot to be said for this strategy:

• You may be able to negotiate a lower price for your property because without a mortgage to arrange, you should be able to exchange and complete on the sale quickly. (Although there's nothing to stop you negotiating and buying with cash, and then refinancing once the property is yours.)
• You don't have to spend valuable time applying for funding.
• You are answerable only to yourself - if you make a bad decision and (heaven forbid!) the property swings into negative equity, you do not have to find money from other sources to pay back the mortgage lender.

Before you opt for this route, however, there are some other points to consider: