Mistakes made by amateur property developers

We are all aware that property development is a very lucrative business andcan be a rewarding career. The .profile comes with a lot of prosperity andprestige without doubt. Having said that we would also like to highlight thatit is not as glamorous as it appears on paper and is indeed a difficult industryto conquer.

Right from the choice of poor quality wood to the expense on beautifulbathrooms (lavish spending where not required), we can enlist any numberof errors that an amateur property developer may make. These amateurproperty gurus are trying to make a quick profit from and we in turn areoften tempted with the idea of buying a house, maybe to make profit inselling it or for living in the space thus created. This may sound simple andeasy but one should remember that the wrong choice of property developer,like an amateur one, can lead to many issues and mistakes made. There areseveral mistakes that an amateur can make with your property and propertyrenovation is full of issues and traps.

You may end up losing large sums of money. For one, an amateur wouldtend to underestimate the costs involved in the execution of the project orthe time the project will take to complete.

The common man is not aware of the limitations of an amateur propertydeveloper and can make costly mistakes by choosing the wrong one.Property development is a surely a lucrative business. Those of whom aresuccessful in property development can enjoy a rewarding and satisfyingcareer, laden with prestige and prosperity. Having said that we have toemphasise that, property development is not always as glamorous as it mightappear on paper and is a difficult industry to conquer.

How does one go about choosing from a long list of property developers andhow does one know the high profile property developer who would neverfail to hook on to the property market on time? Looking for the glaringmistakes that amateurs make can be a good starting point. Here we are tryingto insulate our readers from these mistakes by choosing the right propertydeveloper. By highlighting the common errors that amateurs can make, weare trying to create awareness and we try to ensure that you choose the rightproperty developer.

Making a purchase in the wrong area

The location is crucial indeed while choosing a property. This is a veryimportant aspect of real estate and buying property in the right area iscrucial for the success of the project as a whole. The property preformingwell in the market depends entirely on the location and it is a commonpractice among amateur developers to believe that a certain property isperforming well in the market while that may be far from reality. Buying aproperty in the wrong area at a price which is not appropriate or is over andabove the requirement will indeed lead to huge losses. This is seen as one ofthe major errors that property developers can commit. Also, investing in aspace thinking that it is the next “up-and-coming area” while in actuality itis not will be another big mistake that one can commit. If this is not the casethen no one will be willing to pay a huge price for a property which is reallynot worth so much. A good example for these would be houses that aresituated on busy highways and main roads as well as those with pooravailability of transport.

Not doing the necessary homework

Being a very tricky business, not doing the necessary research and therequired homework can lead the property developer into a lot of problems.He could make a fortune or lose the entire amount leading to incurring debtsfor the rest of his life. Therefore the property developer has to necessarily dothe ground work before he plunges into any kind of assignment. Mostamateur property developers fail to do this due to lack of experience as wellas the lack of understanding of the business and the areas involved. Vitalquestions such as the going value of properties in a particular locality as wellas the stamp duties etc. will help the property developer get the estimatesright, but this does not fall within the capability of the amateur propertydeveloper. They compete with professionals who spend 100 percent of theirtime looking for profitable ventures.

Using a builder who comes cheap and who is himself inexperienced

The quality of the property will depend fully on the quality of the builderbeing employed. It is therefore imperative that you use a builder who isconsidered top notch but is reasonable at the same time. To identify such abuilder one needs the necessary contacts and experience in choosing one butthis may be found lacking in an amateur property developer. So the idealthing to do would be to get a quote from several contractors and builders andget references from their clients from the past. Make sure you have chosenone with the necessary credentials.

The Amateur property developer may end up getting you deals where youpay expensive rates for finance

The amateur property developer will end up borrowing more than therequired amount since he would be poor at making proper estimates. Thiswill once again lead to a loss for you in terms of paying more interest onamounts borrowed without a requirement. It is imperative that for a projectto succeed one should be realistic in making estimates and ensure you knowthe exact figures for cost of renovation and proper time estimates.

So if you are looking for a property developer ensure that you check hiscredentials thoroughly and ask all the right questions of him / her before youplunge into a deal if you wish to keep away from losing money.