If you’re an amateur property developer, then it’s really easy to underestimate the cost of the build. We’ve put together a few hints and tips for you to make sure that you don’t make the big mistakes, and lose money on your investment.
Buying in the Wrong Area
When you’re buying a property to do up, you need to think very carefully about who will buy that property. If it’s an up-and-coming area, but it’s still not very nice, then no one will want spend a fortune to live there. You might think that it’s easy to find a gem, but houses on main roads or those in areas with poor transport links will always go for a cheaper price than the same house in a different place.
Paying Expensive Rates
No matter how much money you think you’re going to make, never borrow more than you can afford. Always look for the best deal and try to be realistic about how much time and money the renovation will cost you.
Using a Cheap Builder
Your property will only be as good as the builder you use. So it’s important to make sure that your builder is top notch, but won’t over-charge. So, get a quote from a range of builders or contractors and get references from past clients. Make sure they sign a fixed price contract before giving them the go-ahead.
Scrimping on Quality
If you’re renovating a property, it’ll be much more valuable if you use the real deal. No faux handmade tiles or cheap wooden floors, as potential buyers will notice the detail if you cut corners. Choose appliances, fixtures and fittings for their quality and their durability, even if you have a small budget. Don’t scrimp on the exterior either, first impressions really matter in this game.
Spending Too Much
Don’t go over the top, either. Instead of going for silk carpets and solid marble bathrooms, opt for clean, fresh and reasonable.
Staging it Personally
While you might love your taste for black walls, potential buyers will be unlikely to feel the same. Decorate in a neutral style, because it is likely to appeal to the highest number of viewers. Aim to keep rooms as light and bright as possible, so viewers can easily see the potential of the space.
The same goes for furniture. Avoid anything too quirky. Companies like David Phillips offers rental furniture for exactly this purpose, and you can even offer it to the buyer if they want the furniture as well as the house.
While going alone is tempting, it’s probably best for you to partner with experienced property developers. You might not get as much profits, but you can definitely reduce, or even eliminate, the unnecessary costs related to making a mistake in your investment analysis and planning.
Good luck in your endeavor!