Top 5 Common Mistakes First-Time Property Developers Make
Avoid complications when Developing Your South-East Properties
At Hunter Finance, we’ve overseen over 250 property developments across the South East of England. We consider ourselves pretty experienced with property developments and loans. Our property loans have helped first-time developers to experienced ones.
However, if you’re beginning your career in property development, make sure you get ahead of the curb by avoiding critical mistakes others have made.
South-East of England is Big, don’t buy in the Wrong Area
Property development can be a profitable venture for all parties involved. We help fund developments in various counties such as Hampshire to Bedfordshire. But a common mistake first-time property developers make is buying in the wrong area.
“It’s incredibly important to research the area you want to develop your properties in. If the area is unfavourable, it’ll be increasingly difficult to find keen buyers.”
We strongly recommend researching the area. We’ve covered London hotspots [Link to London Blog] that are worth looking into. Remember, think about who is going to live in the area of the properties you build.
Too Many Bedrooms
We oversee a lot of development in London; however, a common misconception with first-time property developers is that bedrooms sell houses. Whilst there may be some truth there, it shouldn’t compromise the living space of the entire property.
“More bedrooms don’t necessarily mean more buyers. Buyers are increasingly beginning to value the living space that the property offers. A small box room can affect the buyer’s attitude to your property.”
When reviewing the designs for your properties, evaluate how much living space it offers to potential buyers. Don’t cram the floor plan with bedrooms just for the sake of it.
Not Developing a Network
A vital aspect property developers need to understand is building a network. You can’t build a property alone. You’ll need to rely on electricians, decorators, plumbers and most importantly, builders.
Having contractors sign fixed contracts can be a good way to ensure their work is done on time and on budget.
Rushing Ahead with Plans and Development
Property development requires careful management and realistic timescales. Planning permission can be a lengthy process as can listing the property on the market.
“There have been various cases where first-time developers are too keen to get their project underway, even without the correct paperwork to begin. Make sure you’re fully prepared and take your time with planning.”
Property development can be increasingly difficult if you’re simply looking to make a quick profit. Shorter, unrealistic timescales can cause more time-consuming mistakes to pop-up and quality may be compromised.
Unaware of the Current Market
Similar to location, research and assess the current housing market. Various counties in the South-East of England are predicted to do better than others. Take this into consideration when building your properties.
“Property Developers need to consider who their target market is. We’ve helped fund developments for flats for those looking to get onto the property ladder to bigger family homes.”