- Underestimating the costs It can be easy to get carried away with the excitement of the project and underestimate what the whole project is going to cost you. Ensure you take into account any hidden costs like surveys or delays. Ensure you put in place a conservative budget and a contingency plan just in case. When it comes to costs – play it safe!
- Cut corners The temptation can be to cut corners so you can save the money and make a greater profit on the project. As tempting as this can be, it really can end up biting you at a later date. Of course search for the best deals, but buy products that are going to stand the course of time. Potential buyers will be able to tell if you have fitted the property out with average products and it’s guaranteed to put them off.
- Failure to do your homework Plan, plan and plan some more. The more work, research and planning you do in the early stages the more stress and money it can save you in the long run. Make sure you have all the facts, plans, permissions and budgets in place. This is a good time to bring in an expert like Nick Fox who can ensure you are on the right track.
- Incorrectly managing your cash flow Cash is king and if you run out then you have a crisis on your hands. Like any business cash flow is everything so work hard in the planning stages to manage your cash. Go over the budgets with a fine tooth comb and cross every ‘t’ and dot every ‘i’. Failure in this area and can bring the whole project to a grinding halt.
- Sell too low It’s easy to get dragged into selling a property at a lower price that you had envisaged because you are keen to move it on and get onto the next property. Try not to fall into this trap. Have a figure of what you want to sell at and stick to it as much as you can. After all the blood, sweat and tears you don’t want to give the house away. Take longer if needed, but get the price that your project deserves.
- Bring in the wrong team Your project is built around the quality of the people that you bring in to do the relevant works. Again, this is an area that many people try to cut corners on but it can be a huge mistake. Before picking your team make sure you get references and check out their previous work. As much as possible try and get referrals for the builders, electricians and plumbers you are going to use. Also, make sure you agree a price within the budget that you have set and ensure it’s a fixed cost or the price can start to unexpectedly rise leading to cash flow problems.
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