While property development might seem to be a terrific way to earn money, it’s important to know what mistakes to avoid. Someone jumping into the property development game without having the right information can quickly get caught up in having to do damage control.
Here are four ways problems can arise when developing property:
- Failing to canvass the neighborhood.
Before even thinking about developing property, it’s always advisable to spend time in the community. Get to know the neighbors and develop a feel for what their views on any potential development might be. Going throughout the neighborhood, in addition to generating goodwill, can also provide useful information from not revealed in standard documentation.
- Underestimating the cost.
In the early stages of planning property development, it can be easy to underestimate the actual costs of the project. Before embarking upon the development, it is wise to sit down with various contractors to get a solid idea of the cost. It is also important to remember unexpected costs can creep into a project, resulting in a development going over budget – which will cut into the profit margin of the developer.
- Failing to find the best builder.
While it can be tempting to use a builder who promises to come in under budget to deliver a quality product, the wisest course of action is to find a builder who has sterling credentials. Property development is a competitive business, and while many builders out there will be able to “talk a good game,” when it comes time to actually deliver the goods, some of them fail to produce what they promised. It is better to start off with a builder who already has a solid reputation, rather than going with someone without a track record.
- Failing to check on various legal issues.
Although no one likes to wade through oceans of legal paperwork, the wise property development team understands it’s a necessary evil. Making sure every “t” is crossed and every “i” is dotted early in the process can save valuable time and money further down the line. Having a legal expert working is one of the best ways to ensure everything can go as smoothly as possible when it comes to legal issues centered on the property.