Today’s blog post is about the stress inducing mistakes that property developers can make. If you are a new investor, be very aware of these; and even if you are a seasoned investor, it can’t hurt to make sure you still know what not to do.
We don’t often like to post anything negative or problematic for property developers, however, we know it can be very stressful to enter into property development, and we know these mistakes are much easier to avoid when we make you aware of them!
The first mistake that can cause stress, is not understanding the risk involved with property rental markets. There are always risks to property rental and renovation, these can come in many forms and they are often only a problem when there is no foresight. For example, when it comes to property renovation, if you were to buy an older house for a very low price there may costs further down the line and the property may need more work doing to it than a younger property (as long as you expect to spend the money you have saved due to the cheaper price, you’ll be in a good position). In a different example, if you are running a HMO, a risk is that multiple rooms become empty and this will drastically reduce the money that the property is making (you can plan for this, it’s an issue if you have no spare capital and need the money immediately). There are risks to property development, once you are aware of them they can be managed.
Another mistake that people can make is not having a plan. This is a slightly difficult issue, as often plans can change (if you were selling a house that you had renovated, selling at the right time may mean moving fairly quickly to get a sale). However, the mistake is making quick decisions without considering the impact on your portfolio and your income. You need a plan to make sure you are earning enough to cover your outgoings and that you can include expanding your portfolio or making sure you have some money spare in case something goes wrong. Remember: staying to the plan can be stressful, deciding what to do without one is infinitely more stressful.
A third mistake is not checking up to date regulations. When working within a house, this isn’t always an issue. You don’t need to check the planning permission to put a lamp in a room or add some better blinds to a bedroom. However, if you are planning work (even if it seems relatively small) it’s worth reading up to see what the regulations are. For example removing or replacing a fence may seem like a brilliant idea until you realise that the property next door has listed status, causing you a great deal of unneeded stress (and meaning you have to pay a hefty fine).
You should be checking in and monitoring your portfolio, it’s a mistake not to. Your portfolio is telling you both what you are earning and what you can spend, it highlights the prices that people are expecting to pay to live in a property, and it’s even suggesting where to invest further. Without checking it regularly, you may end up spending more than you expect or find your profits declining.
A final mistake is not consulting the experts. If you were going to run a marathon, sail to France, or start a business, you’d make sure you consulted with experts in the field and got the best advice available. Heading into property development without speaking to someone who knows the property market, knows how to develop a property, and has experience, is going into a complex industry blind. Before you think about making money from property, read a Nick Fox book or speak to Nick Fox via this website.
If you avoid making these mistakes, you can have achieve property investment success, without feeling at all stressed out!
Nick Fox started his property investment career 10 years ago and his portfolio has grown to one of the largest in the UK. Nick now mainly focuses on HMOs (houses in multiple occupation) and works to help others achieve property success too. Visit here to find out how he can help you.
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