Those who are just starting out in property development and refurbishment would be well advised to read this article. Because if there’s anyone who is potentially going to make the following mistakes, it’s you!
1. Decorating for you. Yes, you like a bright feature wall and those glittery bathroom floor tiles that are all the rage. But for the person you’re trying to sell or rent the property to, it might be the first thing they want to change or disguise. Stick to neutral colour schemes and non-fancy fixtures and fittings. Not only will this allow your potential buyer or renter to see themselves in the property, but it’s less cash you’ll be forking out too.
2. Underestimating the time it’ll take. Possibly the one thing most amateur developers get wrong. Even if you’ve meticulously planned your build schedule, there’s no guarantee you’ll be able to stick to it. Builders go out of business, people get ill, schools close unexpectedly. Life happens, in other words.
3. Choosing the wrong location. Buying in the right spot for your target market is absolutely essential. What family wants to live in a top floor flat in the middle of a busy high street, for instance? Is that pretty cottage on the outskirts of town, where they’ve just shut down the bus route? Is it really a good potential student let?
4. Bigging up the bedrooms. By ‘bigging up’ we mean adding more bedrooms by transforming dining rooms, kitchens etc. If you’re trying to sell a big four-bedroom home to a family (rather than to a landlord as a student let) then they’ll probably appreciate the space rather than another bedroom.
5. Getting over-enthusiastic. So, you’ve bought your first renovation property at auction. Congratulations. Before you pile on in there and do some damage, sit back, take a rest, breathe. Are all the planning permissions through? Should you be double-checking your budget? And that brings us on to the next point…
6. Botching the build costs. Another biggie is to underestimate just how much the building renovations are going to cost. It’s not uncommon to go over by as much as £30,000 to £50,000. Could you afford that?
7. Being overly-confident. A certain amount of confidence is good – we’d never get anything done otherwise. But trusting yourself too much, and not listening to what other seasoned property developers are telling you, can cause your investment plans to go awry. Listen to those who have already ‘been there, done that’ so you don’t repeat their mistakes.
8. Asking too much. Once your renovation property is complete you may be tempted to increase how much you’re asking for it (in order to make up for your ‘big’ overspend on building). But go for a realistic valuation instead. Do this by getting at least two different opinions.
9. Going it alone. To do a professional job you need professionals around you, and before you even think of buying a property, it’s a good idea to know which builders, plumbers, electricians etc. you’re going to use for your renovation. That way you’ll have had time to check each company and their pricing out beforehand as well as knowing they’re available to fit in with your timescales.
10. Selling or letting at the wrong time of year. Very few people have the time and inclination to go and look at properties during the cold, dark winter months. So why put your renovation property on the market then? Sure, you’ll get the odd savvy buyer – who’ll probably ask for a reduction due to lack of interest – but by far the best time to get potential buyers to come and see your spectacular property is during spring and summer.
Speak to Sam Ballard who specialises in investment property.
Call 0333 123 1330