property developer

7 Common mistakes made by amateur property developers & how to avoid them

As an amateur property developer, you will discover along the way that mistakes are common, however, there are some to look out for immediately to avoid any costly issues – here are some examples and how to avoid them:

Buying in the wrong location

The biggest mistake that any amateur property developer could make is buying in the wrong area. They tend to get excited by the prospect of cheap property in need of renovation and buy without giving it enough thought.

Trouble is, houses are usually cheap for a reason and that’s because not many people want to live there. If you aren’t sure where the up and coming locations actually are then consider taking inspiration from a seasoned professional in the business, such as Jason Harris at First Urban to get some advice. You can look into First Urban’s business on Duedil.

Overstretching funds

When it comes to obtaining a mortgage, buy within your means instead of going for the more expensive option that may end up giving you sleepless nights and extra stress in the future. The mortgage rates in the UK are still relatively low so it’s a good time to buy. Just ensure you do your research and price things up before you get into trouble.

Going too fast

If you’re too keen to make your money, then you’ll probably end up making mistakes that will cost you in the long run. You need to set yourself a realistic timescale that includes everything from planning permission to the final sale going through and document all of this important paperwork all the way through.

Timing is everything

You’ll see houses on the market for months over the winter without selling, purely because people aren’t usually looking to buy during the winter months. Make sure you plan for your properties to be finished and on the market inside the optimal selling seasons of spring and autumn. This way, you’re more likely to get the asking price and the photography will look much better than in the gloomy winter months.

Not having a network

Even if you’re working on your own as a property developer you need to build a network of trustworthy contacts around you to ensure success. This includes builders, plumbers, electricians, decorators and mortgage advisors at the bank. If you think that you can do it alone you may end up facing overpriced work, getting overcharged by the builder or ending up with a property that has a lot of problems in the long run.

Going over the top

You want your houses to sell but if you try too hard when it comes to interiors, chances are that people won’t feel comfortable in the home. You need to keep up with the times when it comes to style and design and make houses feel like homes rather than show homes.

Not considering the market

Finally, as a property developer, you need to decide who your target market is. This will depend a lot of your prior research into the area you want to work in and looking at who the biggest spenders are. Once you’ve done your research you can tailor your property to suit that particular market therefore having a higher chance of a quick sell.

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