Buying a house, renovating it beautifully and cashing the profit from its sale tempt us all, but in truth, things don’t really pan out like that for many developers. Yes, the industry is a good way to make a profit but how much you make is where it the realism sets in. The industry is prone to peaks and troughs, and for a budding property developer, this could spell disaster before you’ve even begun your portfolio.

Underestimating is also a major player in this game, as we all have aspirations to get plans off to a flying start but in reality, you could be met with bad weather conditions, slow builders and lack of funds to complete a project.

If this is still enough to tempt you into investing your money into a sometimes-risky yet lucrative sector, take a look at some the things you should consider before entering the industry.

Location is key

If a deal is too good to be true, it usually rings true for many properties that have bargain prices. Whether it’s in a bad neighborhood or is somewhere that needs a full-scale renovation, there are reasons for those cheap prices. Location is one of the things budding property developers can get wrong, and this could lead to a bad start in the field.

Many people think this is an easy task but you will be up against developers that have been working the market for years, and if they’ve left something unturned, you can bet it isn’t worth a look. Having a keen eye for spotting opportunities is key, but this doesn’t just come from gut instinct. Researching areas, learning the ropes and getting on the good side of agents will get you ahead of the competition for the best investments.

Underestimating costs and time

Being realistic about the whole renovation cost is important when getting funding for a project. Don’t load yourself up with finance, no matter how much you think you’ll make as this could land you in hot water with the lender if it falls through. Being aware of how much things will cost and research everything from legal fees to planning regulations will set you on the right track when monitoring expenses. You can get conveyancing quotes online from reputable resources, plus discover tons of other resources to guide you on understanding budgets and money management.

Don’t get personal

At the end of the day, this is an investment, not a property you’re going to be living in so ensuring you stay impartial is important. You can, of course, add your stamp to it in some way but implementing a full-scale interior plan to your tastes will not present the property to buyers in the most effective light. Your ideas may actually limit the investment potential if you get carried away with the small details so taking a step back and letting the professionals do the work will see you reap the rewards.

Property development is something that deserves a good deal of thought before jumping in. If you want more advice, it’s best to speak to property experts who’ll give an insight into the industry.