Five mistakes new property investors make
Checking planning permission requirements
If you are planning to remodel, renovate, or repurpose a property and realize profits that way, you first have to ensure that this is possible and allowed. If you are not likely to be granted a permit for development, you might be wasting your money. On the other hand, if you are buying in a prime location and would like to cash in on the views and area, you will need to contact the local planning office to find out whether there are pending applications that can interfere with your profits.
Developing on credit
While you might want investors to back your project, you cannot carry on developing on credit, unless you are absolutely sure about your return on investments, or have the money in the bank to pay it back when things go wrong. It is always better to get investors involved than taking out a business loan that will probably become payable before your project is finished or you flipped the house.
Not having a Plan B
Most newbie investors strongly believe that their plan will succeed, and they don’t have an alternative route to achieve their target profits. In the property development business, you should be prepared for things going wrong, tasks being delayed, and contractors or buyers disappearing. Having a Plan B can save you from a lot of headaches and help you carry on despite the difficulties.
Those new to property investment and development should learn the tricks of the trade before they would start their first project. Learn how to manage your budget, contractors, and check predictions and planning applications, and – most importantly – have a Plan B.