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Thanks to the abundance of programs on TV dedicated to property development, it's beginning to feel as though buying a property to 'do up' and sell on is the in thing to do. That if you don't do it you're somehow averse to making easy money!
Well, if you've ever sat watching a property show on television and thought to yourself "I could that" - who could blame you. Many of these shows feature people who quit their jobs, get into development, and manage to quickly make a five-figure profit despite not really knowing what they're doing. On the flip side, there're the people who worked full time on a house for months and made a loss. There's nothing easy about property developing. But there are things you can do to make becoming a developer less stressful.
Decide in advance who your market is: The first thing to do is to decide what kind of property you want to create and whom you think will buy it. To be safe, check with local estate agents that such a market exists; you don't want to be searching for buyers that simply aren't there. When you are looking for a potential property, keep your target market in mind - remember, you're not going to live in it so buy with your head, not your heart.
Research, research, research: There are plenty of risk points within property development, the biggest being your choice of property to work with. Whatever you do don't rush into buying a house without researching the area and potential for profit first. You should try to find areas that are not in fashion now, but are clearly on their way up. Don't buy in an area that's becoming run down - property there will be cheap for the wrong reasons.
Read the local paper to keep up-to-date with what's happening in the area, paying particular attention to crime levels.
Buy cheap: Tell local estate agents you are moving into property development and ask for help to find suitable houses. you'll be doing them a favour if you buy from them. It will also be worth you speaking to all of the local property auctioneers to see what's coming up for auction in the next few months.
Keep a hold on the purse strings: The next stage is to try to spend as little as possible. Every pound you spend on the house is potentially another pound off your profit - because, at the end of the day, that's the reason you're doing this - to make a big fat profit. And don't forget that's why you're doing this: to make a profit.
Don't make it personal: When you're doing your own home up, you can afford to take time and money to get it perfect. When you're in property development you can't. A property is a tool to earn you enough money to live on, and buy the next property.
The worst thing you can do it fall in love with the house or mould it how you would want it to be. Yes, you may have great style, but everyone's different, and people are more likely to be paying top dollar for your house if they can see it doesn't need much work doing, and is essentially a blank canvas they can turn into a home.
Get stuck in: If your idea of property development is getting someone in to do every job, it's probably more a hobby than a business. Qualified labour is expensive and should be restricted to the things you're not allowed to do yourself, such as electrical or gas work, or skilled things you're not good at like bricklaying or plastering. Paint the house and do the garden yourself. Remember, potential buyers will probably change these things anyway.
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